Taking lessons from the ongoing controversy of GMR group's Male airport contract cancelled by the Maldives government, the Centre is pushing for a bilateral Investment Promotion and protection Agreement (BIPA) with Venezuela, where Indian companies have huge investments.
Hugo Chavez-governed Venezuela has a history of nationalising private companies including multinational projects that deal in natural resources.
Leading Indian companies including Reliance Industries and ONGC have huge investments in Venezuela, with more planned. Moreover, India imports more than 7% of its crude oil requirements from the South American nation.
"We greatly need a BIPA agreement with Venezuela because of the increased risk of investments," a senior petroleum ministry official said.
"The investment environment is difficult there even if it offers tremendous opportunities."
He said international oil and gas firms that have invested in Venezuela have in the past experienced problems in recovering compensation dues, and as Venezuela has also withdrawn from International Centre for Settlement of Investment Disputes (ICSID), hence a BIPA is a necessity.
Significantly, Venezuela has itself raised the issue of concluding bilateral agreements in different sectors in time for the second meeting of the Indo-Venezuelan Joint Commission to be held early next year.
"Recently Venezuela has in a highly unusual step actually invited our firms for a two week briefing on potential oil fields on offer for investment," a petroleum ministry official said.
The gas fields where Indian companies have invested will eventually guarantee long-term energy security of the country, he said.
Drafts of a BIPA were first exchanged between Venezuela and India from 2000 to 2005, but nothing came of it.
"The draft forwarded by Venezuela in 2005 would have addressed of most of our concerns," he said.
Since then nationalisation of companies has picked up pace.
"We expect the Venezuelan government's position on the draft BIPA must have changed since 2005. In fact, BIPA was not among the list of pending agreements sent to us by the foreign ministry," the official said.