India, China plans for oil sector cooperation at early stage - Indian official 08.26.2005, 12:07 AM
NEW DELHI (AFX) - Plans by India and China to mount joint bids for global energy assets are still at an early stage and any future cooperation does not exclude competition, said Talmiz Ahmad, the head of the Indian oil ministry's international division.
India, which has been scouring the globe for fuel supplies to feed its fast growing economy, said earlier this week that major Indian oil companies will sign cooperation pacts with China's top energy firms later this year.
Ahmad said plans for collaboration by the neighbours are still at an early phase.
'We are at the pioneer stage. We are taking the first footsteps of cooperation,' he told Agence France-Presse.
He added that 'cooperation does not exclude competition' for resources by India, which imports nearly 70 pct of its oil needs, and China, which relies on foreign producers for one-third of its oil supplies.
The countries' expanding fuel appetites, spurred by booming economies, have strained world energy supplies and helped propel oil prices to record highs.
They have been rivals for stakes in oil and gas projects around the world. In the latest case, India's state-run Oil and Natural Gas Corp (ONGC), narrowly lost to China in a bid for Kazakhstan's third-largest oil producer.
Afterwards, India's Petroleum Minister Mani Shankar Aiyar said the loss underscored the 'need for China and India to adopt a collaborative approach in bidding... whenever possible.'
'On the basis of assessments (Indian and Chinese) companies will make, we will cooperate and we will compete,' Ahmad said. 'Hopefully we will cooperate more than we compete.'
Memorandums of understanding between companies such as India's ONGC and Indian Oil Corp and Chinese firms Sinopec, China National Petroleum Corp and CNOOC will be signed when Aiyar visits China in November.
Afterwards, 'a joint bilateral working group will be set up to monitor progress of cooperation and promote the momentum of cooperation,' Ahmad said.
The countries will focus their attention on four main areas -- the Caspian Sea region, Central Asia, Africa and Latin America, Ahmad said.
'In the first instance, our companies will engage (with Chinese companies) in an information-sharing dialogue on specific proposals with a view to coming up with possible joint offers,' he said.
India first raised the idea of cooperation in talks with the Chinese after the left-leaning Congress government was elected in 2004.
Ahmad said that a senior Chinese company official told him when he visited China this month as part of an Indian Joint Task Force that 'once Indian and Chinese companies join together, there will be no targets beyond them.'
Ahmad dismissed suggestions by analysts that Washington, which is looking at India as an economic and political counterweight to China in Asia, might be uneasy over energy cooperation between the neighbours.
'We both share a long common boundary -- both history and geography dictate we will have to work together,' he said. Energy cooperation was a 'natural' outcome of fast-growing trade and increasing political co-operation.
'This is a world of multiple engagements and multi-polar linkages,' he added, saying India was also seeking energy cooperation with the United States.
'Any attempt at (imposing) exclusiveness will fail.'
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