Friends in Oman

Prime Minister A.B. Vajpayee's recent visit to Oman helped strengthen India's relations with the sultanate, especially in the field of economic cooperation.

JOHN CHERIAN
recently in Oman

THE Sultanate of Oman has been one of India's closest friends in the Gulf region. In fact even the nuclear tests that India carried out in May have not affected bilateral ties, despite the fact that some of Oman's neighbours have tilted towards Pakistan. Senior officials in India's Foreign Ministry say that India and Oman have had a "special relationship" since Prime Minister P.V. Narasimha Rao's visit to the sultanate in 1993. It was during this visit that the agreement to cooperate in the hydrocarbon and fertilizer sectors was reached.

Sultan Qaboos bin Said Al Said, Oman's ruler, is known for his non-conformist approach to international and regional issues. (The Sultan, who is also Prime Minister, holds the Defence, Finance and Foreign Affairs portfolios, besides being the Commander-in-Chief of the armed forces.)

Sultan Qaboos came on an official visit to India in 1997. During this visit many important agreements, including the ones relating to the setting up of the Indo-Oman Holding Company with a total estimated capital of $100 million, were signed. The Sultan also proposed the exploration of the possibility of having a framework of "strategic trade alliance" between the two countries.

SUBHASH CHANDER / PTI / AP
Prime Minister Atal Behari Vajpayee with Oman's ruler, Sultan Qaboos bin Said Al Said in Salalah.

With oil and gas supplies depleting steadily, Oman is keen to diversify its economy. According to a senior Foreign Ministry official, India too wants to bring about a qualitative change in its relationship with Gulf countries such as Oman, which have until now revolved around the purchase of crude and the supply of labour. He said that India wanted to have a more broad-based and politically enduring relationship.

Oman is one of the few countries in the region that have made it a policy to abstain from voting whenever a vote on Kashmir is taken at international forums such as the Organisation of Islamic Conference (OIC).

Oman has friendly relations with all its neighbours. It has also had long-standing and strategic ties with the United States and the United Kingdom. The U.S., the U.K. and Iran (which was then ruled by the Shah) helped Oman quell the rebellion in the Dhofar region. In return, Oman has, from the early 1970s, provided the U.S. and the U.K. with data on the tankers and other ships passing through the Gulf: since 1980 it has also given them access to its bases.

The Omani base at Goat Island is particularly important to the U.S. since it guards the Hormuz Straits and is only 40 km from the Iranian coast. Twenty per cent of all pre-positioned U.S. supplies in the Gulf, including $1.3 billion worth of military equipment, are located in Oman. Territorial disputes between Oman and countries such as Yemen are now on the backburner. Although the Sultan has coopted a large number of the Dhofar rebels, the country continues to face challenges because of its growing population and limited oil and gas resources.

JOHN CHERIAN
The Salalah port, which is nearing completion, could rival Dubai as a Free Trade Zone in a few years' time.

DURING his recent four-nation tour, Prime Minister Atal Behari Vajpayee made it a point to make Salalah his first post-Pokhran international port of call. Situated in the picturesque Dhofar region, Salalah is the unofficial summer capital of Oman. It has a climate that is almost unique in the Arabian peninsula. By a quirk of nature, the monsoon touches Salalah, and during the rainy season the land becomes beautiful with waterfalls and flowers. Salalah is a premier tourist destination in the region. During Vajpayee's visit, the Indian delegation expressed its keenness to participate in the development of the tourism sector in Oman. Salalah is also being developed as a port, which could in a few years' time rival Dubai as a free trade zone.

During his talks with the Omani ruler, Vajpayee conveyed India's anxiety over the spread of fundamentalism and terrorism in the region. The consolidation of fundamentalist rule in Afghanistan and its ramifications were discussed by the two leaders. Two of Oman's immediate neighbours, the United Arab Emirates and Saudi Arabia, are among the countries that have recognised the Taliban Government in Afghanistan. Without mentioning Pakistan or Kashmir, Vajpayee reiterated India's determination to fight terrorism. According to an External Affairs Ministry official, both leaders were critical of sectarian extremism and the use of religion in politics. The two countries agreed that the security concerns of the Gulf region and the Indian subcontinent are intertwined.

More important, Vajpayee sought to rationalise the "compulsions" behind the nuclear explosions. Indian officials claimed that Oman "expressed full understanding" of India's position in this regard. According to them, Oman does not believe that there is any threat to the region from India.

However, the major focus of the bilateral talks was on economic matters. Both India and Oman are founder-members of the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) and are keen to give a fillip to the economic integration of the Rim region. India's need for energy sources, particularly for its southern power grid, and the possibility of supplying gas through a submarine pipeline heightened the awareness of the existence of common economic interests. (Around 300,000 Indians work in Oman, providing much-needed managerial and technological skills.)

A. HODALIC-BRECELJ / SAOLA / GAMMA
At an ancient market in Nizwa, 170 km from Muscat, the capital of Oman.

In his opening remarks before the commencement of talks, Vajpayee pointed out that two of India's largest joint ventures were with Oman - the Oman-India Fertilizer Project (OIFP) and the Bharat-Oman Refinery Project. According to an External Affairs Ministry official, the two ambitious projects are proceeding on schedule. Rebutting reports that appeared in a section of the press, he said that no fresh hurdles had cropped up with regard to the fertilizer project.

The OIFP is expected to be commissioned by December 2001. The urea it will produce is meant exclusively for the Indian market. According to a Foreign Ministry official, work will start as soon as a consortium led by Banque National de Paris gives the necessary financial guarantees, which he said were expected soon. The contract for design and supply have been given to Snamprogetti of Italy and Technip of France.

The Bharath-Oman Refinery Project is expected to be completed by August 2002. The promoters of the project are Bharat Petroleum Corporation Limited (BPCL) and Oman Oil Company Limited (OOCL). Under the project, a refinery will be set up at Bina in Madhya Pradesh. The refinery will be supplied with Omani crude through a single-point mooring system from a crude storage terminal at Vadinar in Gujarat. A cross-country pipeline between Vadinar and Bina will be constructed for the purpose.

Oman has also signed a 20-year contract to supply 1.2 million tonnes per annum of liquefied natural gas (LNG) to India. The gas will be used to generate electricity at the Enron power project in Dabhol, Maharashtra.

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