Home | Comment & Analysis    Friday 23 January 2004

Full Marks On Project Sudan, But we mustn’t put all our eggs in one basket


Edits & Columns

By The Financial Express

Jan 23, 2004 — ONGC Videsh Ltd (OVL), the overseas arm of ONGC, has done a commendable job by acquiring stakes in Sudan, a country that was considered a security risk by many. Now, not only is it increasing its portfolio in that country, its success there has also attracted the interest of other Indian companies like Reliance and GAIL. Even the US government is now displaying interest in Sudan - a country that it once tagged as a "terrorist state", and was, in fact, instrumental in pressuring the Canadian oil company, Talisman, to sell its stake in Sudan. Under these circumstances, OVL’s decision to take the plunge in a country that has seen infighting since 1983 is creditable. In fact, given that India has been a late starter in the equity oil game, and its state oil companies have been strapped for the sums needed to compete with cash-rich foreign energy companies, OVL’s strategy to buy stakes in countries that are largely ignored by western oil companies has paid substantial dividends.

That said, OVL and other Indian oil firms should not restrict themselves by putting all their eggs in one - or two - baskets but should cast their investment net further, including in countries that are considered off limits by western countries. Indian companies have the reputation of being diffident when it comes to negotiating overseas investments, and have often lost out to more aggressive and well-heeled players. For instance, China National Petroleum Corp, whose equity oil portfolio reached 21 million tonnes in 2002, has successfully negotiated deals in Africa, Central Asia, Latin America and South-east Asia, even beating some western oil majors, and is now aiming to double its revenue by 2010. Given that India’s oil demand is expected to go up from the current 6 per cent to 8-10 per cent per annum, and its indigenous production will not be able to satisfy this burgeoning demand, its energy security policy behoves that a substantial portion of its demand is met through greater indigenous production as well as equity oil. While recent finds in Rajasthan and the eastern coast by foreign and domestic companies are encouraging and some equity deals have been negotiated in Myanmar, Russia, Vietnam etc, they will not be sufficient to meet the country’s growing energy needs. Indian exploration and production companies have to shed their fixed deposit rate of return mindset and display the boldness required to take the country’s equity stake to at least 20-30 per cent of its oil requirement - even if it means going into countries that may be considered politically risky.

The views expressed in the 'Comment and Analysis' section are solely the opinions of the writers. The veracity of any claims made are the responsibility of the author not Sudan Tribune.

If you want to submit an opinion piece or an analysis please email it to comment@sudantribune.com

Sudan Tribune reserves the right to edit articles before publication. Please include your full name, relevant personal information and political affiliations.
Comments on the Sudan Tribune website must abide by the following rules. Contravention of these rules will lead to the user losing their Sudan Tribune account with immediate effect.

- No inciting violence
- No inappropriate or offensive language
- No racism, tribalism or sectarianism
- No inappropriate or derogatory remarks
- No deviation from the topic of the article
- No advertising, spamming or links
- No incomprehensible comments

Due to the unprecedented amount of racist and offensive language on the site, Sudan Tribune tries to vet all comments on the site.

There is now also a limit of 400 words per comment. If you want to express yourself in more detail than this allows, please e-mail your comment as an article to comment@sudantribune.com

Kind regards,

The Sudan Tribune editorial team.

The following ads are provided by Google. SudanTribune has no authority on it.

Sudan Tribune

Promote your Page too

Latest Comments & Analysis

Turkey and Africa are building a solid partnership 2018-05-24 22:55:24 by Turkish Foreign Minister Mevlüt Çavu?o?lu As Turkey marks the annual Africa Day, I take the opportunity to celebrate Africa’s achievements and rejoice in our developing partnership. Africa’s (...)

Sudan’s Bashir is playing a dangerous game 2018-05-23 05:09:04 The attempt of the Sudanese president to engage with rival regional interests in a bid to stay in power might fail. By Ahmed H Adam Sudan's political crisis is sliding into a dangerous phase. (...)

Salva Kiir’s cunning strategy 2018-05-19 07:40:06 By Duop Chak Wuol Salva Kiir likes to preach democracy to confuse people, looks for ways to legitimize his atrocious regime, uses deception to promote his despotism, and calculatingly waits for (...)


Latest Press Releases

The Suspension of Hurriyat Online Newspaper 2018-04-29 07:04:37 Sudan Democracy First Group 28 April 2018 The Sudanese civil and political circles and those concerned with Sudan were shocked by the news that the management of Hurriyat online newspaper has (...)

Petition on the Deteriorating Human Rights and Humanitarian Situation in Sudan 2018-04-22 10:01:20 UN Secretary-General, New York African Union Commission, Addis Ababa UN High Commissioner for Human Rights, Geneva Petition on the Deteriorating Human Rights and Humanitarian Situation in Sudan (...)

Abyei celebrates Mine Awareness Day 2018-04-05 08:52:03 4 April 2018 | Abyei - The United Nations Interim Security Force for Abyei (UNISFA) and the United Nations Mine Action Service (UNMAS) commemorated the International Day for Mine Awareness and (...)


Copyright © 2003-2018 SudanTribune - All rights reserved.