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A clash of the titans

The international squabbling over access to oil and gas resources should be a concern for India. We must strengthen security in the Indian Ocean region. Vikram Sood writes.

india Updated: Aug 03, 2012 00:00 IST

The US-led war against Iraq in 2003 was never really about Saddam Hussein's nuclear weapons programme or the presence of al-Qaeda in that country. It was about gaining control over Iraq's oil. As the US planned to pull out, ExxonMobil, an American multinational oil and gas corporation, moved into Iraq and eventually won the contract to exploit the West Qurna oil field in 2009. The firm owned some of the best oil fields after World War II, before being thrown out by Hussein in 1972. The firm has now bid for oil exploration in Afghanistan just about the time when the US is planning to pull out of the country.

For some of us, it might escape notice that ExxonMobil represents American power as much as the Pentagon and Centcom do. The company's annual revenues are larger than the economy of a large number of countries and wherever it operates, it exerts influence over the politics and security of those countries.

Given the need for natural resources and access to oil and gas, areas of the Caspian Sea and the Persian Gulf along with the continental and sea routes through the Indian Ocean up to East China have become extremely vital for continued global economic development. For the foreseeable future, till the discovery and mass usage of alternative sources of energy, the nation which controls these areas, largely controls the world. National strategies, global politics and power are thus tied with oil as a commodity.

But this time round, ExxonMobil has competitors in Afghanistan apart from Chevron. The Chinese Metallurgical Group Corporation was awarded a 30-year-old, $3-billion contract in the Anyak copper mines in 2007. The Steel Authority of India Limited (Sail) has won a $10 billion bid for investment in iron ore and Pakistan Petroleum and India's Oil and Natural Gas Corporation (ONGC) are now bidding for six exploratory blocks varying from 1,220 to 2,200 square miles north of Mazar-e-Sharif. There are other contenders also but it is suspected that the Chinese have withdrawn in favour of the Pakistani bid. The blocks are estimated to contain a billion barrels of oil. Besides, India is also the largest donor of aid to Afghanistan ahead of Japan and the US.

Afghanistan has become an investment-cum-exploration destination only recently, but the Chinese have been active there for nearly a decade. Despite the efforts made in the last 17 years, Steve Levine, author of The Oil and the Glory, writes that the West has been unable to access the oil and gas fields of Kazakhstan and Turkmenistan. On the other hand, the Chinese were able to get a deal for an on-shore natural gas field in Turkmenistan in 2006 and build a 1,700 km pipeline into China by 2009.

The Americans have talked of a grand plan with Afghanistan as the hub connecting it by road, rail, pipelines and electricity grids to the Arabian Sea and India, but the Chinese already have their version of the new Silk Road connecting western China to Europe via Central Asia. This would exclude the US from the scheme of things. The Turkmenistan-Afghanistan-Pakistan-India (Tapi) pipeline, driven by American interests to keep Russia, China and Iran out of the equation, while controlling the distribution of resources, is a non-starter. It is difficult to realistically visualise a pipeline that goes through Afghanistan and Balochistan. The ONGC and China National Petroleum Corp (CNPC) signed an agreement in June for joint exploration in the Sudan, Myanmar and Syria, something that is viewed with scepticism. This shows just how intricate the world has become. Meanwhile, the southern route from Kunming, Yunnan to Kohima via Mandalay is something that could be considered by strategic planners.

China has taken advantage of the earlier US retreat or disinterest in Africa following its preoccupation in Iraq and Afghanistan and moved in there in strength. It has long-term interests in the Indian Ocean Region. Eventually, China will build a strong enough navy to be present in the region.

The strategy evolved in the past by former American vice-president Dick Cheney stressed on increased domestic production, controlling the oil and gas flow from the Persian Gulf, dominating the sea lanes from the Persian Gulf to the East China Sea, and ensuring Europe reduces its energy dependence on Russia. US President Barack Obama has followed this policy. Libya was more about its oil resources for Europe. The Arab Spring was collateral profit.

We have to always remember that we have an unsettled border with China, a country that has encouraged Pakistan to become nuclear and challenge our conventional superiority. Indian strategists have to keep in mind the possibility of a two-front military situation one of which may be conventional and the other sub-conventional with a perennially recalcitrant Pakistan with its jihadi brigades and China armed to the teeth in Tibet. We need to tie up with the US and South East Asia, including Japan and Australia, for the security of the Indian Ocean. India would need Iran for undersea gas pipelines and road and rail connections from Iran into Central Asia via Mashad for access to Afghanistan as well and these are our abiding interests. Relations with the Central Asian Republics and above all Russia have to be maintained. India must continue to strengthen its own naval and air strike capability for an effective deterrent and retaliation. Only when a nation has capacities can it have capabilities.

The clash of the titans is inevitable in our region and staying aloof may no longer be a viable option. We will have to manage all these contradictions in our interests.

Vikram Sood is former secretary, Research & Analysis Wing

The views expressed by the author are personal

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