Nepal considers government-to-government deal with China

Kathmandu December 10- Senior government officials have started discussions for signing a government-to-government (G2G) deal with China to import petroleum products from the northern neighbour after talks between the oil entities of the two countries failed to make any headway.

A government technical team comprising NOC officials visited China in the third week of November in a bid to negotiate a business-to-business (B2B) deal with PetroChina. However, the process could not move forward in view of a host of issues, including tax related matters.
Officials said the B2B agreement between NOC and PetroChina could not move forward after the Chinese side sought “political commitment at the highest level”. “This means we need to sign a deal at the highest level,” said the government officials who were privy to the development and meetings between the Ministry of Foreign Affairs (MoFA) and Ministry of Commerce and Supplies (MoCS) on Tuesday and Wednesday.

“The B2B pact signed with China earlier will automatically convert into G2G after signing the new [commercial] deal,” said an official, adding that it will ensure ownership of the two governments.

Deputy Prime Minister and Minister for Foreign Affairs Kamal Thapa is expected to travel to Beijing, most probably at the end of this month, to sign the deal. The G2G pact, according to MoFA officials, will stand as political commitment from Nepal, assuring the Chinese side that the government “is serious about importing fuel from the northern neighbour”.