India, China to Jointly Explore Energy Assets Overseas

-       The Wall Street Journal (June 19, 2012)

By RAKESH SHARMA

NEW DELHI—India and China's largest oil companies have agreed to jointly explore for oil and gas world-wide, in an attempt to put aside long-standing rivalry and better use their combined financial muscle and expertise to secure energy supplies for their fast-growing economies.

While the two energy-deficient countries already work together on several international oil projects, they also have a long history of bad relations, and of proposing cost-reducing alliances to jointly buy foreign energy assets and crude-oil that mostly have come to nothing.

According to an initial pact signed Monday between state-run Oil & Natural Gas Corp. of India and China National Petroleum Corp., the two will jointly explore assets in other countries, cementing existing partnerships in Myanmar, Syria and Sudan.

"We think it is better to cooperate than compete," said Dinesh Sarraf, managing director of ONGC Videsh Ltd., ONGC's overseas investment arm.

ONGC Chairman Sudhir Vasudeva last month said the explorer wants to grow through partnerships and will secure alliances for new resource types and areas like shale gas and deepwater exploration.

China has been more successful than India in getting oil and gas equity stakes across the globe, often providing large loans and funding for infrastructure projects in developing nations to tie up deals signed by its four state-owned energy giants, the largest of which is CNPC and its listed unit, PetroChina Co.

Tensions between India and China have been troubled by a long-simmering border dispute in the Himalayas, India's hosting of Tibetan spiritual leader the Dalai Lama, and Chinese support for Pakistan. Relations took a turn for the worst last year because of a sovereignty row in the South China Sea, much of which is claimed by Beijing.

ONGC, which had been exploring Block 128 offshore Vietnam, was sharply criticized by China last year for violating its sovereignty—a charge Hanoi vehemently rejected. Last month, India's junior oil minister, R.P.N. Singh, said the company will return the block to Vietnam.

Whether that decision was significant in the agreement on a new pact is unclear.

In January 2006, India's oil ministry and China's economic planning agency, the National Reform and Development Commission, signed an initial pact for bilateral oil cooperation, including possible joint crude purchases.

But five years later, Mr. Singh conceded that progress had been slow as "there has been no sharing of information on crude purchases by the oil companies of the two sides."

India hasn't been very open to Chinese companies investing in either its energy or telecommunications sectors, citing security concerns, although Chinese power-generation equipment companies have been successful in the Indian market.

Among projects that ONGC Videsh is working on with CNPC is a pipeline to transport Myanmar gas from the Bay of Bengal across the country into southwestern China, which is due for completion next year.

The two also work together in Syria, where they jointly hold stakes in 36 producing fields, as well as in Sudan, although oil output there has largely halted due to military clashes between North and South Sudan.

Both CNPC and ONGC are among companies that have expressed interest in building an oil pipeline from South Sudan to Kenya's East African coast, to bypass the traditional export route through the north.

Hong Kong-based Mirae Asset analyst Nipun Sharma said the latest agreement seems to be merely a renewal of an existing exploration pact.

"The previous pact only resulted in a handful of projects, including one in Sudan. This time around, if the two nations are able to better align their economic and political interests, we could see more joint exploration projects ahead.

"This would be a definite positive for ONGC, which needs to accelerate its internationalization program in order to increase production and reduce its exposure to domestic oil pricing risks."

Indian exploration companies have been seeking partnerships with other overseas oil and gas majors to gain access to technology that will help them increase output and widen their geographical footprint.

ONGC signed an initial agreement with ConocoPhillips in March to look for opportunities for jointly exploring and developing shale-gas reserves in India and North America and deepwater blocks along India's east coast.

--Simon Hall in Beijing contributed to this article.

http://online.wsj.com/article/SB10001424052702303836404577476090216555460.html?mod=WSJASIA_hpp_LEFTTopWhatNews

Make Every Drop Count

- Hindustan Times

You can call it a summer ritual. Every year, without fail, there are reports in the media on India's water scarcity and spats between states over the control of this precious resource. This year too, it's the same story. On Thursday, Delhi claimed that Haryana is "arbitrarily and drastically" curtailing the supply of untreated water to its two water treatment plants. Haryana denied the charge. However, Delhi is not the only metro that faces a water crisis, most metros face the same crunch. And the going is sure to get tougher in the future: according to a World Bank report, by 2020, most major Indian cities will run dry. Such warnings are not new for India; they have been coming for some time now: way back in 1992, a UN report had warned the country that "there will be constant competition over water, between farming families and urban dwellers, environmental conservationists and industrialists, minorities living off natural resources and entrepreneurs seeking to commodify the resources base for commercial gain". As things stand today, India is not water scarce, it is slowly sinking into water stress. This is leading to conflicts since 90% of the country's territory is served by inter-state rivers.

India's climate is not dry, nor is it lacking in rivers and groundwater. Basically, India's water scarcity is a manmade problem thanks to poor management, vague laws, corruption and human and industrial pollution. A growing economy and a large agricultural sector have also put pressure on the water resources. Then there is the threat of climate change: erratic and unpredictable weather could significantly diminish the supply of water coming from rainfall and glaciers. As the demand for water goes up, India would face a slew of subsequent problems, such as food shortages, intra-state, and international conflict. According to a study done by the US-based Arlington Institute, migration and urbanisation would also lead to further shortage because people in the cities lead water-intensive lives than those who live in rural areas thanks to the amenities of urban life such as flush toilets and washing machines.

The only way to reverse this trend is to learn from India's traditional water harvesting methods, manage water better and install water harvesting systems in offices and homes. But sadly that is not happening. According to a report, only one councillor of the Municipal Corporation of Delhi out of 272 used the allocated money (R5 crore) on installation of water harvesting systems! Every year, the city gets 900 billion litres of rainfall and if the water harvesting systems are in place this year, we can easily conserve 300 billion litres. Along with these steps, it also needs to treat human, agricultural, and industrial waste effectively, and regulate how much water can be drawn out of the ground.

http://www.hindustantimes.com/News-Feed/Editorials/Make-every-drop-count/Article1-873046.aspx#disqus_thread