China and India go toe to toe over West Africa's oil
china.scmp.com
Saturday, October 16, 2004
AGENCE FRANCE-PRESSE in New Delhi
India and China are locked in a battle to secure stakes in oilfields in West Africa, according to officials and analysts in New Delhi.
"There is big, big competition going on between India and China for oil blocks in the region," says Narendra Taneja, an energy expert associated with the international oil and gas newspaper Upstream.
Mr Taneja points to an Indian Express newspaper report bemoaning India's loss of a lucrative deal in Angola this month.
Angola's state-owned Sonangol reportedly blocked an Indian move to buy Anglo-Dutch energy giant Shell's 50 per cent share in Block 18 for about US$620 million.
According to Mr Taneja, India's state-run Oil and Natural Gas Corporation (ONGC) had almost closed a deal with Shell, "but the Chinese evidently cut a deal with the Angolan government at the last minute", resulting in Sonangol exercising its pre-emption rights.
This stymied Shell's move to sell its stake to ONGC, a deal that would have yielded about five million tonnes of crude oil a day for India from 2008-2009.
An Indian official said the sale was "still open", but for Mr Taneja it illustrates the intense Sino-Indian competition.
"China managed to swing the deal by offering aid to the tune of US$2 billion for a variety of projects to Angola, compared to India's offer of $200 million for developing railways," Mr Taneja said. Aid-for-oil is part of a strategy adopted by China across West Africa.
The amount of oil in the region is yet to be mapped, but Indian officials point to US studies which say America can rely on Gulf of Guinea reserves to cut its dependence on crude from the volatile Middle East by 25 per cent in the next decade.
"Washington is negotiating with Sao Tome and Principe to develop a naval base there to guard its oil interests in the region," said an Indian Foreign Ministry official. Beijing is aggressively building a network of energy-related ties throughout the world.
China used 5.46 million barrels of oil a day last year, compared with Japan's 5.43 million, according to the International Energy Agency. China relies on overseas producers for one third of supplies and accounts for about 7 per cent of world oil demand.
In contrast, India imports almost 70 per cent of its oil needs and last year consumed a little more than two million barrels a day.
Chinese leaders, including President Hu Jintao , have made a beeline for Africa, signing deals with Algeria, Gabon and other states, besides promising millions of dollars in aid. |
