India woos Central Asia to secure energy supplies
India so far has managed to get minority stakes for ONGC in projects in Russia, Sudan and Iran.india Updated: Nov 24, 2005 15:14 IST
is the India plans to build bridges with Central Asian oil producers to secure energy supplies, but analysts said Asia's third-largest oil consumer would take years to match rival China's success in oil diplomacy.
India's oil minister, Mani Shankar Aiyar, has invited top government officials from Russia, Uzbekistan, Kazakhstan, Turkey and Azerbaijan for a day-long meeting on Friday with Asia's top oil importers: China, Japan, India and South Korea.
Aiyar, who wants closer ties between oil producers and Asian importers, hosted a similar meeting between oil-rich countries in the Middle East and Asian buyers last January and suggested long-term supply contracts and investment by Asian countries.
Petroleum Secretary SC Tripathi said the meeting of Central Asian countries would carry forward the January meeting's agenda.
"We want to promote criss-cross investments to tie Asian producers and consumers in mutually beneficial engagements," he said.
India, which imports 70 per cent of the oil it consumes, is seeking oil abroad because domestic output has stagnated and its demand is rising as its economy, Asia's third-largest, booms.
So far, India has not made much headway in its efforts to invest in Central Asian oil projects. State-run Oil and Natural Gas Corp. (ONGC) was outbid by Chinese rival CNPC in the $4.2 billion takeover of Canadian-listed PetroKazakhstan.
Indian officials admit their diplomatic initiatives have not yielded great results as it has only managed to get ONGC minority stakes in projects in Russia, Sudan and Iran.
ONGC's first big overseas success came this month when its joint-venture with India-born steel baron LN Mittal and his Mittal Steel, the world's largest steel maker, won oil exploration rights in Nigeria in return for up to $6 billion in infrastructure investment.
"Diplomatic initiatives take time. China started 10 years before us. We are continuing our efforts," Tripathi said.
Analysts are sympathetic with India and its uphill battle.
"The country has made a good beginning. But the government should have a clear policy that looks beyond oil," said TNR Rao, India's former petroleum secretary.
He said unlike India, China viewed petroleum assets not only for the value of the oil but their strategic importance for the country.
"If you only look at the value of oil, ONGC did not underbid for PetroKazakhstan, China overbid. But if you see the strategic importance of the asset for China, their bid was justified," Rao said.
Nagarajan Narasimhan, head of research at Crisil Infac, said India's efforts to secure oil supplies were at an initial stage.
"Not much was done for decades. In the last few years, people have at least understood the need for diplomacy. China has been in this market scouting for blocks for a decade or so," he said.
First Published: Nov 24, 2005 15:01 IST