China link in oil raises brows | delhi | Hindustan Times
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China link in oil raises brows

delhi Updated: Jun 22, 2010 23:21 IST
Anupama Airy
Anupama Airy
Hindustan Times
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Security concerns over investments by Chinese companies continue to be top on the government agenda. The latest company to come under the home ministry scanner is Mass Financial Corporation, a firm based in Hong Kong and incorporated in Barbados.

The firm recently purchased an 18 % stake in Canadian company Canoro Resources Ltd, which has operations in an oilfield — Amguri in Assam.

Suspecting it to be a case of indirect investment by a Chinese company in an oil-and -gas field in the security-sensitive Assam, the home ministry has ordered an investigation. Home minister P. Chidambaram in a letter dated May 28 has asked Petroleum Minister Murli Deora to look into the matter.

The move comes close on the heels of Indian security agencies raising concerns and barring equipment supplies by Chinese telecom firms, Huawei and ZTE, to Indian operators.

With a 40% stake, Canoro is the joint venture partner of Assam Oil Company of India in the Amguri oilfield. Canoro, being the operator also has a big say in the field’s operations.

Confirming the move, a senior petroleum ministry official said Canoro has been served a show-cause notice on May 31, 2010 over its financial transaction with Mass Financial.

“The Canadian company did not seek the Indian government approval while proceeding with the transaction. It is required to do so under its contract with the petroleum ministry. We have told Canoro that its inaction may even lead to the cancellation of its contract...” he said.

Assam Oil Company MD Aditya K. Jajodia was unavailable for comment and Canoro did not respond to mails.

However, Canoro in a recent statement on its website, has confirmed being served the show-cause notice besides defending its deal with Mass Financial. The company has clarified that its deal did not violate the terms of the production sharing contract (PSC). It also allayed concerns that Mass was a Chinese company. According to Canoro, Mass is a Barbados-incorporated company and 68% of it is owned by Americans.