By Noor Mohd, IANS
New Delhi : Two years after they ended years of rivalry, India and China are only now beginning to give shape to their camaraderie in oil and gas exploration.
After meeting here last week, Indian and Chinese officials are unveiling a roadmap to jointly stake rights to oil and gas assets in various parts of the world.
An Indian official said a concrete example of this cooperation is already at work in Colombia, where ONGC Videsh Ltd (OVL) and Chinese firm China Petroleum and Chemical Corp (Sinopec) have jointly won a bid to acquire 50 percent stake in Omimex de Colombia.
Before that, China National Petroleum Corp (CNPC) and OVL jointly won a bid to acquire 37 percent of Petro-Canada’s stake in the al-Furat oil and gas fields in Syria.
The gross domestic product (GDP) of both India and China is growing at an annual rate of 8-10 percent. At this pace, their energy requirements are shooting up.
The global energy demand will rise by 55 percent by 2030, from the 2005 level. India and China will together account for as much as 45 percent of the additional energy demand growth, according to the International Energy Agency.
It was in January 2006 that India’s ministry of petroleum and natural gas and China’s National Development and Reform Commission signed a memorandum of understanding (MoU) in Beijing on joint exploration, production and acquisition of oil and natural gas resources in third countries.
Now OVL has entered into a pact with the China National Oil and Gas Exploration and Development Corp, the international arm of CNPC, for cooperation in oil and gas exploration and production activities in third countries.
Other Indian oil and gas companies like Indian Oil Corp and Gas Authority of India Ltd (GAIL) as well as Engineers India Ltd have also signed cooperation pacts with Chinese companies.
GAIL has signed an agreement with China Gas Holdings Ltd to jointly pursue city gas projects, coal bed methane (natural gas found in coal beds) opportunities and pipeline and liquid natural gas projects in China, India and other countries.
GAIL has acquired nine percent stake in China Gas and has agreed not to sell the shares for two years.
It would have been difficult to even imagine five years ago that India and China, bitter foes in the game of hunting oil and gas assets abroad, would find merit in working together in pursuit of energy security.
The China National Offshore Oil Corp (CNOOC) and CNPC had been competing with OVL on lucrative overseas deals.
In 2003, OVL was close to clinching a $600-million deal in Nigeria for a 50 percent stake in an offshore hydrocarbon block. But the Chinese muscled into the negotiations and snatched away the deal by promising a billion-dollar investment to modernise the Nigerian rail network.
The Nigerian government refused to allow OVL to follow through on the deal by exercising its “right of first refusal” to take the block away from it and gave it to CNPC.
Chinese companies had similarly elbowed OVL out of lucrative deals in Angola, Ecuador, Kazakhstan and Myanmar.
Now, OVL has no reservations on cooperating with Chinese companies for the acquisition of oil and gas assets abroad.
Indeed, OVL is quite enthusiastic about working with the Chinese, says its director for exploration J. Thomas.