Tuesday, January 10, 2006

Indian minister sees new energy cooperation era as heads to China

NEW DELHI (AFP) - India's petroleum minister called for a new era of energy cooperation with China to avoid costly competition for fuel assets as he prepared to visit Beijing.
India has dubbed 2006 the "Year of Friendship with China" with which it has often been a bitter rival in the race for global fuel supplies and fought a brief border war over four decades ago.
"A cooperative relationship is not only desirable but eminently feasible," Petroleum Minister Mani Shankar Aiyar told reporters in the Indian capital before his departure late Tuesday for Beijing for the two-day visit.
Aiyar said "opportunities for cooperation will exist everywhere" and that his visit would herald a new chapter in India-China relations.
The countries, which rely heavily on energy imports to sustain their fuel-guzzling economies, have become the world's most aggressive seekers of foreign oil and gas properties.
Aiyar called on China to cooperate in bidding for overseas energy reserves to prevent rivalry in which the two sides bid up prices, making energy acquisitions unnecessarily expensive.
His planned visit was the second by a high-level Indian government figure this week. On Tuesday, Indian Foreign Secretary Shyam Saran held "friendly and pragmatic" talks in Beijing, Chinese officials said.
"China-India relations are on the track of fast development," said Chinese foreign ministry spokesman Kong Quan in Beijing.
The countries whose economies are the world's two fastest growing declared last April they would team up to bid for some energy assets.
"Instead of playing the 'Great Game' of bitter rivalry, we wish to prepare a mode of cooperation which is adapted to 21st century imperative of countries of Asia living in peace and cooperation," Aiyar said.
"The Great Game" was a term coined to describe the 19th-century rivalry between Britain and Russia for dominance in Central Asia where the spoils sought now are the Caspian energy reserves.
"Markets will dictate competition among the companies from the two countries sometimes but there will be opportunities where it might be in the interest of both parties to cooperate and submit joint bids," Aiyar said.
Aiyar's trip comes after India and China won a joint bid last month to buy Petro-Canada's 37 percent stake in Syrian oil fields for 573 million dollars.
The acquisition by India's Oil and Natural Gas Corp and China National Petroleum Corp, both state-owned, was the first time the nations bid together.
But some analysts described it as a consolation prize for New Delhi after China's regular outbidding of India, most recently last August when it won Kazakhstan's third-largest oil producer.
Analysts have been dubious about the potential for cooperation between the neighbours who have a history of suspicion and whose strategic interests are often at odds.
"These countries are mainly in competition," said Rahul Bedi, correspondent for Jane's Defence Weekly. "All this is more rhetoric than reality."
Aiyar said, however, "the Chinese do see advantage in working with India".
The Indian Express newspaper quoted Xia Yishen, head of a Chinese government energy think-tank, as saying "the necessity of cooperating to share risks and reduce costs in a multilateral way is gaining currency here".
Aiyar was to leave New Delhi late Tuesday and arrive the following day in Beijing. He heads back to New Delhi late Friday.
Aiyar will hold talks in Beijing with Ma Kai, Minister of the National Development and Reform Commission and other leaders in China's energy sector.
The two sides are expected to sign a slew of memorandums of understanding on energy cooperation, including between ONGC Videsh Ltd, India's flagship firm for overseas oil and gas field acquisitions, and its Chinese counterpart, China National Petroleum Corp.


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