India is close to converting its commercial association with Middle East oil suppliers into a strategic relationship in which India will hold stakes in oilfields in the region for the first time ever, while Gulf companies can invest in oil infrastructure, refineries and petrochemicals, helping Indian consumers by increasing competition in the market , oil ministersaid.In an interview with Himangshu Watts, Pradhan also said initiatives taken by the government in the exploration sector as well as plans for bio-fuels will help meet Prime Minister Narendra Modi’s directive to cut India’s oil import dependence by 10% compared to earlier projections. Excerpts.The prime minister has given us the target to reduce import dependency by 10%. First, we found it challenging, but now we find it achievable. Our existing fields will plateau, but there are upcoming oil and gas fields. There is bidding for small and marginal fields. We also brought a new pricing mechanism for difficult fields.Fields like Ratna had not been monetised for nearly 20 years due to indecision. Small fields were also not monetised. We took a transparent decision that will improve production. By 2022, these initiative will cut import dependency by 5%. We are monitoring all fields. In 2013-14, the management committees of oilfields met only 10 times. Since 2014-15, they are have been 100 meetings a year.These fields will start production. In this financial year, many will declare investment plans and come into production in the next 3-4 years. It will have significant production.GSPC and ONGC are commercially discussing the matter for mutual benefit. They are engaging with each other commercially. It’s a company to company talk. It hasn’t come to me. My advice to them is to use common facilities in the KG Basin and to make a joint strategy to monetise it. They are talking. Both will have to set up joint infrastructure. In foreign companies, rival companies set up joint facilities. In Gulf of Mexico, such facilities work. BP, BG, Chevron and ExxonMobil use infrastructure together. They are competing in the market. But the cost of production has to come down. When cost comes down, then government’s profit will increase.In challenging fields, ultra-deep water fields, there are three primary stakeholders: ONGC, GSPC and RIL-BP joint venture. All have said publicly that they will increase investment as the price makes it viable. It’s a big statement. Also, IEA director general rang me up, and he wrote to me. He is very appreciative. He is a neutral and independent authority. IEA has communicated his appreciation for our new policy.These companies go by the international oil price. Their strategy and approach is a bit different from a sovereign oil company. Oil price has fallen, so MNC’s E&P expenditure has fallen. State firms haven’t cut. ONGC and Aramco has not cut; private sector has cut. We have enabled the policy, they can come any time.Today there is no Asian premium. I believe PM Modi’s decisive leadership has had a big impact. No producing country can ignore the Indian market. We renegotiate long-term prices with Qatar. We have halved it. Not only Saudi Arabia. UAE, Qatar, Iraq. Countries in our basic procurement area feel that offering good terms to India is to their advantage. They trust Indian market because there is a decisive government under the leadership of Prime Minister Modi. When we get oil on good terms, our companies and customers will gain.The PM has had three major interactions with producers in the Gulf in the past year (Qatar, UAE and Saudi Arabia). The prime minister will go to Iran . This shows that the Gulf countries want to increase relationship with India.Certainly. We are on a very positive note. This kind of assurance they have given to our PM. This is unusual.We don’t have stakes in exploration and production projects in the region. This is a major oil producing region. India is in Russia, India is in Africa, India is in US Shale. Where is India in the Persian Gulf? Today we are talking to Iran, UAE, Aramco that we don’t just want (proper) prices, but on the basis of strategic relationship we should also get equity in E&P projects, then we can fortify our interest.