China, India stoke energy bond
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In December 2005, oil companies from the two countries teamed up for the first time to purchase 37 percent of oil assets in Syria that belonged to the Canadian Oil Co at a cost of $573 million. India Oil and Natural Gas Corp is also working with China Petroleum and Chemical Corp in Iran to exploit Aveda Varan oil field, of which China holds 50 percent and India holds 20 percent in shares.
On Feb 22, 2005, India Gas Co signed an agreement with China that India would invest $243 million in China Gas Co. It became the first-ever cooperation between listed companies of the two countries. In August 2006, China and India worked again to buy 50 percent of the shares of an oil field in Colombia.
In January 2006, Indian Petroleum Minister Mani Shankar Aiyar led an Indian natural gas delegation to visit China, helping in the signing of five agreements.
Moreover, the multilateral dialogue on energy has become a stage for Sino-Indian cooperation. In November 2004, India invited China, Japan and South Korea to hold a meeting in New Delhi in the hopes of collectively negotiating with Middle East oil suppliers to reduce oil premiums. In early 2005, India hosted a round table meeting of "Asian Ministers on Oil Co-operation", inviting China and other countries. At the meeting, major oil-consuming countries in Asia, including China, Japan, South Korea and India, agreed to adopt a unified position to deal with the "Asian premium" and oil security issues together.
On Dec 16, 2006, energy ministers of China, the US, Japan, South Korea, and India met in Beijing to discuss energy security issues, how to maintain the stability of the international energy market, and form a relationship of cooperation instead of competition. The summit and dialogue of foreign ministers between China, India and Russia also called for strengthened energy cooperation between them.
China and India, with rapidly growing economies, are also seeing a dependent rise in energy demand. Since both are large energy consumers and importers, there are some contradictions and competition between them. Therefore, we must pay attention to sticking to the following basic principles in considering Sino-Indian energy cooperation in the post-crisis era.
First, strengthen communication. Efficient communication between the two will enable them to know the situation well and make use of it.
Second, avoid unnecessary harm. With huge populations between them, China and India should hold long-term talks to avoid any "lose-lose" consequences.
Third, advance the exchange of technology. The two have comparative advantages, and should learn from each other for common development.
Fourth, jointly promote the stability of the global energy market. China and India have limited abilities because of their developing status, but both should strive for more power to speak their minds.
The author is a researcher at the China Institutes of Contemporary International Relations.
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