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A F R I C A November 1997, the U.S. imposed sanctions against Sudan on the charge that profits from oil were being used to fuel civil war. The pressure of sanctions had kept most of the American and Western oil companies out of Sudan, except for a Canadian firm, Talisman energy. Talisman had acquired Araxis’ share in the GNPOC. India entered the Sudanese oil sector when Talisman decided to withdraw from the consortium after sustained pressure from the U.S. and the human rights groups. OVL invested $750 million to acquire the 25 percent equity held by the Talisman group in GNOP. The CNPC has 40 percent of the equity, Petronas has 30 percent and 5 percent of the equity is held by Sudapet. In June 2004, the Union Cabinet approved a $200 million project to lay a pipeline from Khartoum to Port Sudan on the Red Sea.5 As of now, India gets 3.23 million tonnes of equity oil from GNOP in Sudan. In 2004, China outbid India in its attempt to pick up 11 percent stake in the Block 3 oil field in Sudan. The field was generating 400,000 barrels per day. However, the government’s delay in decision-making cost us the deal, with China walking away with the spoils.6 They offered 17 percent more than what India was bidding and signed up immediately. Subsequently, in 2005, ONGC acquired participation in two more blocks — 5A and 5B. Angola: Angola is regarded as one of the oil industry’s hotspots. It has reserves of over seven billion barrels, reputed to be larger than those of Kuwait. Further, it apparently is one of the most successful non- OPEC countries in the world of oil exploration: Its reserves increased four-fold in the 1990s alone. More than 40 percent of the oil is exported to the U.S. market and production is projected to increase to 2 barrels per day by 2008. Chevron Texaco, Angola’s largest oil producer, is currently pumping more than 500,000 barrels per day and Total, Exxon Mobil and BP are also heavily invested. Sonangol, the national oil company, regulates the oil industry and is also involved in product distribution, industry support services, banks, businesses, the Luanda refinery and a host of non-commercial activities. India has been trying to acquire equity in some Angolan oil fields. In April 2004, OVL announced that it had reached an agreement with the Royal Dutch/Shell group to buy 50 percent stake in an offshore oil field in Angola for $ 600 million. OVL was buying out Shell’s entire stake in Block 18, a deepwater exploration block along with the Greater Plutonio development. This deal was important because it is a discovered field. We will not be wasting time and money in exploration. The 50 percent stake in the block implies an annual yield of five million tonnes of oil right away. However, the completion of the transaction was subject to approvals by the government of Angola and pre-emption rights of BP Plc and Sonangol SA. But, the deal did not materialise. Sonangol exercised its first right of refusal with Shell, pre-empting its bid to sell its 50 percent of the offshore Block 18 to OVL. The Indian government tried to persuade the Angolans, but to no avail. Why did the Angolans change their mind? It seems mainly due to Chinese pressure. China has been actively lobbying for acquiring the stake in this particular oilfield. Suspicions are that Sonangol tilted towards China because of a $2 billion aid pack-

Q U A R T E R L Y

age. India had also offered an economic package earlier, that included economic assistance of $200 million spread over two years, manpower training and a railway rehabilitation project. But obviously it was outweighed by the more attractive Chinese offer. Hopefully, there will be chances of India investing in another block in the country. India has gone ahead with its economic assistance programme, particularly the $40 million railway rehabilitation project. Ivory Coast: Ivory Coast is a small but significant oil producer in West Africa. OVL has reached an agreement with Vanco Energy Company to acquire 30 percent participating interest in an offshore exploratory block. This is the first acquisition by OVL in the West African region. The block is spread over an area of 4,156 sq. km in San Pedro Basin. The hydrocarbon resource potential in the block is estimated to be in excess of one billion barrels. OVL has negotiated the acquisition of 40 percent stake in Block C1-112. It offered 10 percent participating interest in OIL, retaining 30 percent with it. Ghana: In October 2004, OVL entered into an agreement with Ghana National Petroleum Corporation (GNPC) to study prospects of oil exploration in the West African nation. The two companies have entered into an MOU. The agreement has mutual benefits. While India will gain a foothold in oil exploration in the country, Ghana hopes to learn from OVL’s significant competence and know-how in exploration and production activities. The cooperation could be extended to training of GNPC staff in India. Charting a New Course The foundations of India’s policy towards Africa were laid during the premiership of Pandit Jawaharlal Nehru. They were to a large extent driven by the country’s search for an international role. One was the rhetorical role embodied in India’s determination to act as a voice of the downtrodden and the subjugated. India took a number of initiatives and representations against colonialism and racism. It was also driven by the realisation that India’s freedom struggle was part of the larger struggle against colonialism in Africa and Asia. Another component was the emulative role: India was one of the three leading nations that conceived and designed the nonaligned policy framework. India’s nonaligned foreign policy framework was quite attractive to most African countries. In the post-Nehru era, few other components were added. They were development and peace. On the development front, India has identified with the development concerns of the African countries and worked for strengthening South-South linkages through transfer of intermediate technologies and providing training to manpower in different areas, from agriculture to defence. Finally, India has always striven for peace in Africa. Our commitment to this agenda is reflected in our substantial contribution to the U.N. peace keeping and monitoring operations in Africa. In the post-cold war era, with the decolonisation of Namibia and the end of apartheid rule in South Africa, one of the important components of our foreign policy towards Africa –– that of solidarity and support against decolonisation and institu-

February-April 2007

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AQ-Feb-2007-Apr-2007  

February 2007-April 2007

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