The Hindu : Business : India can invest up to $25 b for overseas oil acquisition

Online edition of India's National Newspaper
Thursday, Mar 24, 2005

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Business

India can invest up to $25 b for overseas oil acquisition

By Our Special Correspondent

The Union Petroleum and Natural Gas Minister, Mani Shankar Aiyar, conversing with the Assistant Chairman of China Council for Promotion of International Trade, Wang Jinzhen (left), at the conference `The China Miracle' in New Delhi on Wednesday, The Chinese Ambassador, Sun Yuxi, looks on. — Photo: Sandeep Saxena

NEW DELHI, MARCH 23. India today indicated that it could invest up to $25 billion in acquisition of overseas oil and gas fields and asked its rival, China, to join forces in attaining energy security.

Addressing a two-day meet on "The China Miracle 2005'' organised by the Confederation of Indian Industry, the Union Petroleum Minister, Mani Shankar Aiyar, said India was in a position to raise $25 billion to invest in acquiring oil and gas properties abroad.

Referring to competition from Chinese companies faced by the Indian state-owned oil firms, which had stakes in oil and gas fields in 12 countries, he said rivalry between the two resulted in the asking prices for the properties shooting up.

However, he said, while India and China would continue to be dictated by market forces and could compete in some areas, there were possibilities of their working together.

Citing the example of Greater Nile Oil Project in Sudan, where OVL and China's CNPC were working together without any clash of interest, he said areas of mutual interest need to be identified so that nations worked together in achieving energy security.

Drawing a parallel between Indian and Chinese economies, Mr. Aiyar said both countries were heavily dependent on imported energy. "There are enormous prospects for India and China to work together... Our interests are complementary,'' he said. The Minister said that the Sudan and Khartoum model of co-operation could be replicated in Iran, Sub-Saharan Africa, Central Africa, Latin America and North and Central Asia. "My ambition is not to compete with China, but to explore ways and means of partnering with it,'' he said.

Mr. Aiyar also detailed the Prime Minister Manmohan Singh's model of inclusive growth. "We have to build partnerships between private and public sectors on the one hand and Panchayati Raj Institutions on the other hand in order to replicate the Chinese model of rural industrial hubs that are based on local needs, absorptive capacity and raw material,'' he said.

Asking the Indian business community not to feel humbled or humiliated by China's phenomenal growth, the Minister asked them to feel heartened from China's progress and learn lessons from its growth. "We are averaging 6 per cent growth now and we could sustain at 7-8 per cent in the next several years. So it would be wrong to feel humiliated,'' he said.

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