New Delhi: A recently created team in the ministry of external affairs (MEA) formed to support state-owned energy firms’ expansion overseas will also help private companies such as Reliance Industries Ltd, Essar Oil Ltd and Tata Power Co. Ltd, among others, in tapping energy resources overseas.
The energy cell also plans to shift the focus of its efforts to boost India’s overseas oil assets towards South-East Asia from the current accent on West Asia. Priority will continue on African and South American assets, a senior government official said. This shift is driven by the cell’s view that South-East Asia will emerge the preferred destination for acquiring stakes in energy reserves in future.
“In its bid to provide sustained diplomatic support, the cell will not only cooperate with public sector companies but also Indian corporates forging energy tie-ups overseas,” said a senior external affairs ministry official, who did not wish to be identified.
ONGC Videsh Ltd, a unit of oil explorer ONGC Ltd, Indian Oil Corp. Ltd, NTPC Ltd and Coal India Ltd, as also Reliance Industries, Essar Oil and Videocon Industries Ltd, are some of the companies eyeing global opportunities in coal mining, power projects, refining, and acquiring equity stakes in hydrocarbon blocks.
The energy cell, whose formation was reported by Minton 23 May, is an important part of the Indian energy security programme and will look into enhanced diplomatic relationships with other countries, particularly to resolve sticky issues driven at times by geopolitics.
The move comes close on the heels of India losing out on acquisitions to China in Kazakhstan, Nigeria, Angola and Myanmar.
Experts also believe that improper study of geopolitics in energy and no coordination within the government has resulted in India losing out on deals to China.
New Delhi feels energy security is key to sustaining its economic growth, the seco-nd fastest among major eco-nomies in the world. India, the world’s fifth largest oil importer, procures 78% of its energy needs from abroad.
The external affairs ministry official said India’s search for hydrocarbon equity abroad will shift to countries such as Indonesia, Thailand, Vietnam, Myanmar and Bangladesh. Other countries of importance in this search include Brazil, Venezuela, Ecuador and Cuba, and Angola, Nigeria and Sudan in Africa.
“The long-term supplies from West Asia have already been tied up and saturated. This will also help India diversify its sources of energy, both in terms of geographies and lesser reliance on a single source of energy (fossil fuel),” the official added.
An energy expert, who did not wish to be named, said the benefits of the new focus of the energy cell will extend beyond energy. “India will not only restrict itself to tapping energy resources overseas but also get into related technology such as refining, downstream facilities and strengthening infrastructure such as pipelines and railways besides developing equipment for processing bio-fuels,” the analyst said.