India seeks greater stakes in oil development
Milan (AsiaNews) – Competition for energy supplies, especially oil, is sending more and more Asian countries scrambling to find more favourable strategic and diplomatic arrangements with producers. After Japan and China, now it is the turn of India to join the fray.
According to India's Foreign Minister Natwar Singh, who spoke last week at the 2005 Petrotech Conference in New Delhi, India's energy consumption will increase by 5 per cent per year up to 2010-11 to fuel its 7-8 per cent economic growth. By then India will be the fourth largest energy consumer in the world after the US, China and Japan.
Currently, only 30 per cent of its domestic oil needs are met by internal sources. India must therefore acquire stakes in foreign energy oil fields because, like China, its own supplies are dwindling.
"I find China ahead of us in planning for the future in the field of energy security," Indian Prime Minister Manmohan Singh said who also attended the Petrotech Conference. "We can no longer be complacent and must learn to think strategically, to think ahead and to act swiftly and decisively."
In the last few years oil imports have risen a fast pace. Last year's bill went beyond expectations.
Last year, India produced 32 million tonnes (mt) of oil but its actual consumption was 113 mt. Imports covered up to 70 per cent, but this expected to rise to 85 over the next 20 years.
Significantly, till five years ago half of Indian crude oil imports came from the Middle East; now they are up to three quarter. This makes India even more vulnerable than China to Mideast turmoil.
Lately however Indian public energy companies have followed China's lead and tried to reach to other suppliers and in doing so they have lined contracts to ensure steady supplies. The most recent one was signed on January 7 of this year and involves liquefied gas purchases with Iran worth US$ 40 billion over 25 years.
India's giant public energy company, Oil & Natural Gas Corp (ONGC) is also emerging as China's major competitor for the spoils of Yukos, Russia's former oil giant that was liquidated for failing to pay taxes.
Two weeks ago the Indian government signed a deal with Myanmar involving a gas pipeline running through Bangladesh to supply eastern India.
Last week, Ecuador's Energy Minister Eduardo López was in India to negotiate the possible sale of stakes in Ecuadorian oilfields to Indian companies.
Altogether Indian companies have now a foothold in oil and gas properties in ten countries, including Sudan, Russia, Vietnam, Iran and Myanmar.
New Delhi is also pursuing new opportunities in Columbia, Cuba, Ecuador, Trinidad-Tobago, Brazil and Argentina and the choice of partners and would-be partners show how much it is trying to reduce its geo-strategic risks to possible interruptions to oil flows.
It is however clear that for India ties with Saudi Arabia are as fundamental as those with Iran and Russia—the latter being an historic ally from Soviet times.
Last week Abdallah Jum'ah, chief executive and president of Saudi Aramco, said his company was interested in securing the support of the Indian government to buy refineries and distribution companies in India and increase his country's cooperation with the South Asian giant.
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