India’s Quest for Energy Through Oil and Natural Gas: Trade and Investment, Geopolitics, and Security [1st ed.] 9789811552199, 9789811552205

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Sanjay Kumar Pradhan

India’s Quest for Energy Through Oil and Natural Gas Trade and Investment, Geopolitics, and Security

India’s Quest for Energy Through Oil and Natural Gas

Sanjay Kumar Pradhan

India’s Quest for Energy Through Oil and Natural Gas Trade and Investment, Geopolitics, and Security

123

Sanjay Kumar Pradhan International Relations Pandit Deendayal Petroleum University Gandhinagar, India

ISBN 978-981-15-5219-9 ISBN 978-981-15-5220-5 https://doi.org/10.1007/978-981-15-5220-5

(eBook)

© Springer Nature Singapore Pte Ltd. 2020 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

This work is in memory of my mother late Smt. Sushila Pradhan

Preface

India’s quest for energy has transmitted its relationship with other countries from the buyer–seller to the level of strategic partnership. The economic liberalization and growing demand for more energy resources have prompted India to change its policy to access oil and natural gas assets abroad. Accordingly, diversification and investment are two major approaches followed by the Indian government to intensify its engagement with the oil and natural gas-rich countries in the world. However, in the process of trade and investment, the geopolitical dynamics, domestic issues and security concerns have necessitated for introspection of India’s quest for energy security through oil and natural gas resources. As India is the third largest importer and consumer of oil and natural gas in the world, by 2025, it is expected to overtake China—the second largest consumer of energy after the USA. By 2040, as projected, the Indian market will constitute about a quarter of the growth in global energy demand, and New Delhi is now looking for various international destinations to meet its energy requirements. Significantly, shale energy has added a new dimension to India’s external engagements. India has been looking for all possible overseas destinations for oil and natural gas imports, while stimulating its own sources of energy, along with focus on renewables. India has posed as a potential contender in investing upstream, midstream and downstream sectors of energy economy, and energy has turned as a strategic resource in New Delhi’s resource diplomacy and foreign policy discourse that includes secured, reliable, uninterrupted and affordable supply of energy. Therefore, energy has posed as “second to India’s food security”, and New Delhi aptly tries to achieve its energy security, so as to have a decisive role in international energy architecture, rightful place in the global politics, and a greater degree of independent foreign policy pursuance. Accordingly, India has steered for diversification of its energy basket and investment in the overseas energy assets. India has established or fastened its footprints in the oil and natural gas sectors of Africa, West Asia, Central Asia, the Latin America and the Caribbean (LAC), Arctic, South China Sea, Russia and the USA, along with the pipeline options. While explaining the conceptual frameworks of geopolitics of energy and energy security and contextualising energy security in the Indian context in the first chapter of the book, the subsequent chapters have vii

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Preface

attempted at analysing geopolitics and security aspects of India’s trade and investment in the international energy market-both region and country-specific. In its concluding part, the book has recommended action plan for promotion of existing trade and investment opportunities in the oil and natural gas sectors abroad, while suggesting for renewable energy resources so as to enrich India’s energy basket in its quest for low carbon emissions and clean energy. Throughout the analysis, qualitative method is applied, with some focus on quantitative data. The historical perspective has also been resorted to substantiate India’s strategic engagement with the oil-rich countries and the major powers-broadly through the changing geopolitical dynamics and energy security perspectives. With regard to the literature, the government reports, information from the international and regional organizations and forums, books, journals and internet sources have been extensively used for data collection and analysis. Specifically, my earlier publications—related to geopolitics of energy and energy security—have been referred whenever required, but with the modifications and new orientations. “India and Africa: Quest for Oil and Gas” (Indian Foreign Affairs Journal, July–September 2012), “Spratly Dispute: Looking through Oil and Gas and India’s Energy Approaches” (World Focus, June 2012), and “Indo-Russian Energy Cooperation: Geopolitics in a Fluid Matrix” (Economic & Political Weekly, 10 February 2018) have provided basic grounds to develop Chaps. 2, 6 and 8, respectively, with the due approval of the journals concerned. Gandhinagar, India

Sanjay Kumar Pradhan

Acknowledgements

This research endeavour would not have been possible without the help of a number of people who with their kind cooperation, benign guidance and support made this research work a reality. The constant support and encouragement of my wife Dr. Geetanjali Dutta has enabled me to complete the work in time. My little son Sanket (Sonu) has been an inspiration throughout my research. I am deeply indebted to Prof. Keshab Das and Prof. Tara Nair for their constant encouragement and scholastic guidance despite their busy schedule. I take this opportunity to thank Springer Publisher for accepting my manuscript for publication. I am grateful to the editorial board of Springer and anonymous referees who guided me throughout the process. I owe a lot to the library, colleagues, staff and students of Pandit Deendayal Petroleum University. Not to mention, all my friends, relatives and students have given all kinds of support throughout my research. My special thanks go to Dr. Venkat Ram Reddy, Dr. Katyayani Singh, Prof. Rajarshi Kumar Gaur and Mr. Jenish Trivedi. I would like to mention my gratitude especially to my family members for their unflagging support and steadfast encouragement throughout the research. Having been privileged in getting support and guidance, I owe responsibility for all the errors or omissions in this work. Gandhinagar, India May 2020

Dr. Sanjay Kumar Pradhan

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Contents

1

Conceptual Frameworks . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Energy Perspectives in International Relations . . . . . . 1.2 Geopolitics for Energy Security . . . . . . . . . . . . . . . . . 1.3 Energy Security—A Wider Connotation . . . . . . . . . . . 1.4 Energy Security—An Indian Perspective . . . . . . . . . . 1.4.1 Growth of India’s Oil and Natural Gas Sector 1.4.2 Energy Requirement and Policy Perspectives Since 1990s . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Africa: Existing Potentials with a Promising Future . . . . . . 2.1 Trade and Investment Potentials . . . . . . . . . . . . . . . . . 2.2 Foreign Policy Pursuits and Resource Diplomacy . . . . . 2.3 Chinese Resource Diplomacy-Where Does India Stand? 2.4 Internal Security Challenges . . . . . . . . . . . . . . . . . . . . 2.5 The “New Scramble” for Resources? . . . . . . . . . . . . . . 2.6 Could Energy Deficit Hinder Export? . . . . . . . . . . . . . . 2.7 Can India Have a Better Footprint? . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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West Asia: Trade and Investment in a Geopolitical Intricacy, and Security Worries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Energy—“Asia Bound” . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Trade and Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Geopolitics and Security Challenges . . . . . . . . . . . . . . . . 3.3.1 Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.2 Security Arrangements . . . . . . . . . . . . . . . . . . . . 3.4 Balancing the Adversaries . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Central Asia: Geopolitics and “New Great Game” 4.1 Historicity . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Energy Potentials, Trade and Investment . . . . 4.3 Energy in “Connect Central Asia” Policy . . . . 4.4 The Great Game Versus New Great Game . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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The Latin America and the Caribbean (LAC): An Introspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 The Potentials . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Trade and Investment . . . . . . . . . . . . . . . . . . . . 5.3 Geopolitics and Security Challenges . . . . . . . . . 5.3.1 Venezuela—Oil Socialism or Oil Curse? 5.3.2 Venezuela-US Imbroglio . . . . . . . . . . . . 5.4 A Wavering India? . . . . . . . . . . . . . . . . . . . . . . 5.5 Challenges with a Different Kind . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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103 103 105 112 112 115 116 118 124

6

Other Regions: Opportunities with Complexities . . . . . 6.1 Arctic Energy—A New Frontier of Risk . . . . . . . . 6.1.1 Drilling Challenges . . . . . . . . . . . . . . . . . . 6.1.2 Exploration Implications on Environment . 6.1.3 Geostrategic Competitions and Security . . . 6.1.4 What Prospects for India? . . . . . . . . . . . . . 6.2 South China Sea—Drilling in the Troubled Waters . 6.2.1 Potential Conflicts and Security Aspects . . 6.2.2 New Delhi’s Stakes . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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127 127 129 130 132 135 137 137 142 148

7

Pipelines: Challenges Many, Progress Slow . . . . . . . . . . . . . . . . 7.1 The Essence of Pipeline . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Turkmenistan–Afghanistan–Pakistan–India Pipeline (TAPI) . 7.2.1 Impetus for Pipeline . . . . . . . . . . . . . . . . . . . . . . . 7.2.2 Security Apprehensions . . . . . . . . . . . . . . . . . . . . 7.2.3 Economic Mileage and Geopolitical Gains . . . . . . . 7.3 The Myanmar–Bangladesh–India Pipeline (MBI) . . . . . . . . 7.3.1 Pipeline Pursuit . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3.2 Pipeline Implications . . . . . . . . . . . . . . . . . . . . . . 7.3.3 Progress Without Commitment . . . . . . . . . . . . . . . 7.4 Iran–Pakistan–India Pipeline (IPI) . . . . . . . . . . . . . . . . . . . 7.4.1 Pipeline Pursuits . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4.2 Implications Riddled with Imbroglio . . . . . . . . . . . 7.4.3 Undersea Pipeline Options . . . . . . . . . . . . . . . . . . 7.5 Russia–China–India Pipeline (RCI) . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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151 151 153 153 154 156 157 157 161 162 164 164 165 166 167 173

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Contents

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8

Russia: Energy Surge and Geopolitical Milieu . . . . . . . . . . . . 8.1 Russia—The World Energy Leader? . . . . . . . . . . . . . . . . 8.2 “Asia Pivot” Perspective . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Trade and Investment Potentials, with a Brighter Prospect . 8.4 Crimean Crisis—Balancing the Global Powers . . . . . . . . . 8.5 Clout in Crude Price and Economic Sanctions . . . . . . . . . 8.6 India–Russia–China–US Matrix . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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175 176 178 181 184 185 188 192

9

The USA: Destination for a New Energy . . . . . . . . . . . . . . . . 9.1 The Shale Boom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 Geostrategic Shift and Energy Market . . . . . . . . . . . . . . . 9.3 Trade and Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4 Implications of Cooperation . . . . . . . . . . . . . . . . . . . . . . . 9.5 Shale, OPEC and West Asia Market—Prospects for India . 9.6 Shale Versus Environment . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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197 197 201 203 208 210 212 218

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221 221 227 232 234

10 The Way Forward . . . 10.1 Summary . . . . . . 10.2 Action Plan . . . . 10.2.1 Quest for References . . . . . . . . . .

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Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235

About the Author

Sanjay Kumar Pradhan is an Assistant Professor of International Relations, at the School of Liberal Studies, Pandit Deendayal Petroleum University, Gujarat, India. He received his postgraduate, advanced postgraduate, and Ph.D. degrees from the School of International Studies, Jawaharlal Nehru University (JNU), New Delhi, India. During his Ph. D. programme, he was awarded a centrally sponsored doctoral fellowship to pursue his doctorate by the Indian Council of Social Science Research, Government of India. He has 14 years of teaching and research experience, teaching and guiding undergraduate, postgraduate and Ph.D. students in areas ranging from political science, international relations, law, to liberal studies. His research interests include the geopolitics of energy, energy security, resource diplomacy, international political economy, green energy, climate change and sustainable development, Africa, diaspora, gender, foreign policy, peace & conflict, and theories of international relations. He has published a book and 43 research papers in various respected journals, including the Indian Journal of Social Work, Asian Studies, Indian Foreign Affairs Journal, Journal of Peace Studies, Asian Profile, and Economic & Political Weekly.

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Acronyms

AC ADB ADNOC AEP AFRICOM ANCAP APERC ARF ASEAN ASSOCHAM AU AUC BAU BCM BIMSTEC BOE BPCL BPRL BRICS CAGR CARICOM CBM CELAC CIA CIS CNG CNOOC CNPC COP21

Arctic Council Asian Development Bank Abu Dhabi National Oil Company Act East Policy United States Africa Command Administración Nacional de Combustibles Alcohol Portland Asia Pacific Energy Research Centre ASEAN Regional Forum Association of South East Asian Nations Associated Chambers of Commerce and Industry of India African Union African Union Commission Business-As-Usual Billion Cubic Metre Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation Barrels of Oil Equivalent Bharat Petroleum Corporation Limited Bharat Petro Resources Limited Brazil–Russia–India–China–South Africa Compound Annual Growth Rate Caribbean Community and Common Market Coal Bed Methane Community of Latin American and Caribbean States Central Intelligence Agency Commonwealth of Independent States Compressed Natural Gas China National Offshore Oil Corporation China National Petroleum Corporation 21st Conference of the Parties

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CPCIA CSS CSTO CTL DES DGFI DGH DOC DOE E&P EAEU EEZ EIA EIL ELN ENAP ENARSA EXIM Policy FARC FDI FLEC FNDIC FSB FTA FUC GAIL GCC GDP GHG GNPOC GRM GSPA GSPC GTCL GW HPCL IBFPL IBSA ICD ICJ IEA IEF-16 IMF INDC

Acronyms

China Petroleum and Chemical Industry Association Committee of State Security Collective Security Treaty Organisation Coal-to-Liquid Delivered Ex Ship Directorate General of Forces Intelligence Directorate General of Hydrocarbons Declaration on the Conduct of Parties Department of Energy Exploration and Production (E&P) Eurasian Economic Union Exclusive Economic Zone US Energy Information Administration Engineers India Limited Ejercito de Liberación Nacional Empresa Nacional de Petróleo Argentina’s Energía Argentina S.A Export Import Policy Fuerzas Armadas Revolucionarias de Colombia Foreign Direct Investment Front for the Liberation of the Enclave of Cabinda Federated Niger Delta Ijaw Communities Federal Security Service Free Trade Agreement United Front for Democratic Change (Front uni pour le changement) Gas Authority of India Limited Gulf Cooperation Council Gross Domestic Product Greenhouse Gases Greater Nile Petroleum Operating Company Gross Refining Margins Gas Sale and Purchase Agreement Gujarat State Petroleum Corporation Gas Transmission Company Limited Gigawatt Hindustan Petroleum Corporation Limited Indo-Bangla Friendship Pipeline India–Brazil–South Africa International Cooperation Division International Court of Justice International Energy Agency International Energy Forum-16 International Monetary Fund Intended Nationally Determined Contributions

Acronyms

INSTC IOCL IPE IPI IRENA IS ISA ISGS ISI ISIL ISIS ITEC IUPF JCERDC KG KNOC KOGAS KPC LAC LNG LOC LPG MBI MDGs MECL MEND MMBTU MMT MNC MNRE MOGE MOU MPNG MRPL MT MTCO2 Eq MTOE MW NAM NAMA NATGAS NATO NDC NELP NEPAD

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International North South Trade Corridor Indian Oil Corporation Limited International Political Economy Iran–Pakistan–India International Renewable Energy Agency Islamic State International Solar Alliance Inter State Gas Systems (Private) Limited Inter-Service Intelligence Islamic State of Iraq and the Levant Islamic State of Iraq and Syria Indian Technical and Economic Cooperation Indo–US Parliamentary Forum Joint Clean Energy Research and Development Center Krishna–Godavari Basin Korea National Oil Corporation Korea Gas Corporation Kuwait Petroleum Corporation Latin America and the Caribbean Liquified Natural Gas Lines of Credit Liquefied Petroleum Gas Myanmar–Bangladesh–India Millennium Development Goals Mansarovar Energy Colombia Limited Movement for the Emancipation of the Niger Delta Million Metric British Thermal Units Million Metric Tonnes Multinational Company Ministry of New and Renewable Energy Myanmar Oil and Gas Enterprise Memorandum of Understanding Ministry of Petroleum and Natural Gas Mangalore Refinery and Petrochemicals Ltd Million Tonnes Metric Tons of Carbon Dioxide Equivalent Million Tonnes of Oil Equivalent Megawatt Non-Aligned Movement Nationally Appropriate Mitigation Action National Gas Company North Atlantic Treaty Organisation Nationally Determined Contribution New Exploration Licensing Policy New Partnership for Africa’s Development

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NGHP NGL NITI Ayog NSR OAS OBOR OECD OIC OIL OMEL ONGC OPEC OVL PACE PdVSA PetroSA PSC PSU PSUV PTA QUELRO R&D RCI RE REEEP REN21 R–TAPI SAARC SAGE SAP SCO SCS SICA SINOPEC SIS SNC SOMO TAPI TBD TCF TCM TEAM-9 TMB TPP UAR

Acronyms

National Gas Hydrate Programme Natural Gas Liquid National Institution for Transforming India Ayog Northern Sea Route Organization of American States One Belt One Road Organization for Economic Co-operation and Development Organization of Islamic Cooperation Oil India Limited ONGC-Mittal Energy Limited Oil and Natural Gas Corporation of India Organisation of the Petroleum Exporting Countries ONGC-Videsh Limited Partnership to Advance Clean Energy Petróleos de Venezuela, S.A Petroleum Oil and Gas Corporation of South Africa Production Sharing Contract Public Sector Undertaking United Socialist Party of Venezuela Preferential trade agreement Quantified Emissions Limitation and Reduction Objective Research & Development Russia–China–India Renewable Energy Renewable Energy and Energy Efficiency Partnership Renewable Energy Policy Network for the 21st Century Russia–TAPI South Asian Association for Regional Cooperation South Asia Gas Enterprise Private Limited Structural Adjustment Programme Shanghai Cooperation Organization South China Sea Central American Integration System China Petroleum and Chemical Corporation Secret Intelligence Service (M16) Syrian National Coalition State Oil Marketing Organization Turkmenistan–Afghanistan–Pakistan–India Thousands of Barrels per Day Trillion Cubic Feet Trillion Cubic Metre Techno-Economic Approach for Africa-India Movement Thousand Million Barrels Trans Pacific Partnership United Arab Republic

Acronyms

UN UNCHR UNCLCS UNCLOS UNDP UNEP UNFCCC USGS USISPF USSR VLCC WPI WTI WTO

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United Nations UN Commission on Human Rights UN Commission on the Limits of the Continental Shelf United Nations Convention for the Law of the Sea United Nations Development Programme United Nations Environment Programme United Nations Framework Convention on Climate Change US Geological Survey US–India Strategic Partnership Forum Union of Soviet Socialist Republics Very Large Crude Carrier Wholesale Price Index West Texas Intermediate World Trade Organisation

List of Tables

Table 1.1 Table 2.1 Table 2.2 Table 2.3 Table 3.1 Table 3.2 Table 3.3 Table 4.1 Table 4.2 Table 5.1 Table 5.2 Table 5.3

India’s overseas projects and investments by the end of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Africa’s oil reserves and production by the end of 2018 . . . . Africa’s proved natural gas reserves and production by the end of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India’s investment in oil and natural gas sectors in Africa by the end 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total proved oil reserves and production in West Asia by the end of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total proved natural gas reserves and production in West Asia by the end of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India’s investment in oil and natural gas sectors in West Asia by the end of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total proved oil reserves and production of major countries by the end of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total proved natural gas reserves and production of major countries in Central Asia by the end of 2018 . . . . . . . . . . . . . Total proved oil reserves and production in LAC by the end of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total proved natural gas reserves and production in LAC by the end of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Major Indian overseas projects/assets in LAC by the end of 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

.. ..

21 34

..

34

..

39

..

64

..

65

..

66

..

89

..

90

. . 105 . . 106 . . 108

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Chapter 1

Conceptual Frameworks

The chapter tries to explain the concept of geopolitics of energy, energy security, and energy factor in international relations. This chapter further contextualizes these aspects in the Indian scenario. Since oil and natural gas is a strategic resource and global competition happens for this limited resource, energy geopolitics tries to explain both conflicting and complimentary interest of the both energy supplier and energy importing countries and regions in the world. Geopolitics and internal domestic issues many times in the oil-rich countries result in war, civil war, lowintensity warfare and oil black market, which have adverse impact on oil production, refining and supply process. Energy security tries to explain these aspects in the global energy trade and investment. Since India is the third largest importer and consumer of oil and natural gas energy, energy security has been well integrated to the fulcrum of India’s national security. As there has been dependence and interdependence among the oil-producing and oil-consuming countries, the chapter tries to explain cooperation or conflict among these nations through various perspectives in international relations, such as realism, structural realism, neoliberal institutionalism, complex interdependence and international political economy. Along with these aspects, the chapter will focus on energy security from the Indian perspective which covers India’s energy requirements, origin and growth of India’s oil and natural gas sector, India in the global energy trade and investment, and the policy perspectives to ensure energy security for India.

1.1 Energy Perspectives in International Relations The concept of energy security and energy geopolitics can be interpreted through various perspectives in international relations. This has been more significant since the World War II, which can be explained through realism and neorealism, liberalism, neoliberal institutionalism and international political economy.

© Springer Nature Singapore Pte Ltd. 2020 S. K. Pradhan, India’s Quest for Energy Through Oil and Natural Gas, https://doi.org/10.1007/978-981-15-5220-5_1

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1 Conceptual Frameworks

For long, oil supply has become a subject of major vulnerability-perceived or real, and there has been a growing sense of energy consumption and import dependency. On this context, both realism and neorealism or structural realism have focused on a rational approach of international political relations, which has been shaped by imbalances between the energy-producing and energy-consuming countries in the world. In realism, according to Hans J. Morgenthau, a particular reference has been attributed to political conflicts in connection to natural resources. The realists include general definitions of security in international relations, oil geopolitics, and definition of the latest trends emerged in due course of time, and the final culmination of resource war [1]. According to the neorealist or structural realists like Kenneth Neal Waltz and John Joseph Mearsheimer, states are behaving and acting according to their structural powers within the framework of international system. The Waltzian assumptions are based on the rhetoric that the states struggle for and go for war for their survival within an international system characterized by anarchy, i.e. absence of any central authority at global level, and the rise of power features in the interstate relations, including competition for access to resources, and security challenges. While the countries at the international level were apprehensive of US energy vulnerability in the wake of Arab oil embargo in 1970s, yet Waltz predicted US energy security with a positive note [2, pp. 152–155, 221–222]. However, in the aftermath of the oil shocks, the security of energy supply turned a matter of security motivation for most of the developed countries. Under these circumstances, Waltz highlighted the continuity of strategies for energy geopolitics so as to ensure energy security. The political actors may change but the national strategy continues [2, p. 117]. John Joseph Mearsheimer argues that the states make good strategic move to gain control of strategic resources, and if the circumstances allows monopolization and hegemonizing of natural resources [3]. Out of both these realism and neo realism, the former is an option to enhance power, so as to protect and promote a country’s national interest, and the latter is a compulsion for the nation-state for its survival and security. Although both the realists and neo realist agree with the importance of power factor in international relations, “self-help” system and status quo in the existing economic and political order, yet realism believes in the innate desire of the nations for power, whereas the neorealists portray an anarchical situation where the countries have no option, but to go for power for their survival and security. Unlike the neorealist arguments, the concept of security, as defined by the Copenhagen School of Security Studies, is not considered to be a direct consequence of threat; rather, defined as the consequence of the political interpretation of threat, well known as “securitization”. This school places particular focus on the non-military aspects of security, which is a shift away from the traditional studies on security [4]. Scholars like Barry Buzan of this school points out the need for theorizing security is more specific than just threat or problem [5]. Accordingly, security is conceptualised as a nonlinear reaction to the threat (real or perceived). Having inherited the realist perception of international relations, the Copenhagen School considers anarchy as the salient feature of the international structure which explains states’ behaviour and action towards security matters. However, security, unlike the realist or neorealists, includes five categories: firstly, the political security which involves the internal and

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external stability of state; secondly, the military that includes defensive and offensive capabilities; thirdly, the societal which covers the stability of cultural (i.e. national or religious) identity; fourthly, the economic that includes the access to resources and markets; and fifthly, the environmental which involves protection of ecology [6, p. 19]. The Copenhagen School of Security Studies does not differentiate energy security from other security sectors although its importance is observed in all the sectors of security which can be described through four broad spectrums. Firstly, political security involves in security relations with other states where each state looks for energy self-sufficiency. Secondly, energy availability contributes to military capabilities. Thirdly, environmental security includes the compatibility between rapid economic growth and natural resources management. Fourthly, economic security foresees energy security in the capitalist and growing economies [6, pp. 235–237]. Further, the 1990s and afterwards, the ecology security challenges have thus culminated to the threat of global warming and climate change, which are caused by fast-growing fossil fuel consumptions. The climatic change perspectives thus have necessitated changes in the socio-economic and political attitudes of the society towards the technological advancements for the minimization of emission and consumption of fossil fuels. Stephen Krasner, who believed in the power approach of Morgenthau, Waltz and Mearsheimer, while focusing on liberalism, went to the extent that the less economically developed countries will try to avoid the danger of being politically vulnerable to the pressure emanated from others. However, the states whose hegemony comes under the fear of loss of power to their rivals tries hard to resist the regimes which have posed, or will pose potent danger in future. Although the open trade well provides absolute gains for all the states that engage in international trade, yet some states gain more than the others. State is an autonomous entity which seeks to execute the national interest, which even can go contrary to the interest of the citizens and international actors. The collective good of states is not necessarily corollary to individual states, and the energy-consuming countries, according to Krasner, in twentieth century invested a large proportion of their national budget for investments in the resource assets abroad. His argument is that while the smaller nations focus more on sustaining their territorial and political integrity and economic interests, only the powerful actors will try to remake the world order of their own. This can be substantiated that while the USA used force against Vietnam on ideological counts, Washington restrained on Gulf oil embargo (1970s) because of America’s energy interest. For the liberals, war or civil war is a cancer on the body politic, and the human beings have the capacity to cure such ailment. The treatments to which the liberals prescribed in the eighteenth century have not changed so far: the causes and consequences of war and civil war could be successfully treated with subscription of free trade and democracy. The democratic processes, regimes and institutions, by nature, break the power of the governing elites and contain their propensity towards violence. The free trade and commerce certainly overcomes the artificial barriers between the political units in the world and unites them into one community. The solution to the existing problems can be accrued from the arguments of Adam Smith and Tom

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Paine, who were the strong proponents of free movement of goods and services. If the commerce was expanded to a universal extent, it would extirpate the system of war and civil war, and growth of democracy from within. Congruence to the arguments of Adam Smith and Tom Paine, John Stuart Mill in 1848 claimed that the free trade and commerce was the means to bring an end to all wars [7]. On the same line, the contemporary liberal scholars advocated, it is commerce that has made war obsolete, although strengthening and multiplying the ruler’s personal or party interest which is a natural opposition to it [8]. Thus, the nature of government influence significantly in the allocation of resources. The populist, economically privileged, or self-serving groups shapes the policies for their own ends [9]. Krasner argues that the small and poor states in the south tend to support those governments in the north which facilitate the allocation of the resources authoritatively. The rich states in the North support those regimes in the South which give priority to principles, rules and market mechanisms. By authoritative regime, Krasner refers to principles, rules and procedures that increase the sovereign powers of individual states. However, sometimes, the commonalities of interest prompts countries to work together to regulate international flow, and access of strategic resources, and this approach may not comply to individual country or a group of countries. For example, increase in oil price by the Organization of the Petroleum Exporting Countries (OPEC) in 1970s went contrary to the interest of the Third World oil importing countries [9]. Both the liberal and neoliberal institutionalists went to the extent of analysing international relations with the changing geopolitical dynamics, where economic factors largely shape the relations. President Woodrow Wilson’s vision of transforming global politics from a “jungle” of chaotic power politics to a “zoo” of peaceful and regulated intercourse among the nations [10, pp. 105–106] signifies the necessities of the institutions for the conduct and regulation of bilateral and multilateral relations. His Fourteen Points Programme for the establishment of the League of Nations reflected the desire for a global cooperation based on institutional developments. However, the present-day institutional liberals are less optimist than their more idealist predecessors. They do agree that international institutions can make cooperation easier and far more likely, but they do not claim that such institutions can by themselves guarantee a qualitative transformation of international relations, from a jungle to zoo. The powerful states will not easily be completely constrained. Yet, the institutional liberals do not agree with the realist and neorealist view that international institutions are just “scraps of paper”, and at the complete mercy of the powerful states. The interdependence or “complex interdependence”, in turn, gives rise to institutions or regimes which have their own independent importance, and which can promote cooperation between the nations [11]. Interdependence within the fulcrum of liberalism assumes the use of force as less beneficial for the states and trade transactions. It is best explained by the liberal Richard Rosecrance who advocated in changing characteristics of economic production and correlated economics and international relations. The liberals argue that a high division of labour in the international economy increases interdependence between states, which in turn discourage and reduce violent conflict between or among the states. Still, there remains the risk that the countries may go back to the military options and enter into arms race, and

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thus the violent confrontations. Yet, that is not a norm under liberalism. According to Rosecrance, the less developed or developing countries are prone to war and civil wars since there is the lower levels of economic development, land is the prime factor of production, modernization is far weaker, and little interdependence [10, p. 102] exists in the international economic market that constitute energy market. Further, the international relations, in past, were directed and controlled by state leaders while dealing with other state leaders which were straitjacketed. This could be best exemplified by the use of military force on many issues. The high politics of security and survival had priority over the low politics of economics and social affairs. But, the present-day socio-economic and political dynamics urge the nations to work with the assumptions that the existing international relations are not one-dimensional; rather, multidimensional, where low politics precedes over high politics. Institutions or regimes are of independent importance, and they can promote cooperation between the states [11]. Robert O. Keohane and Joseph N. Nye have construed in-between two theoretical models—realism and liberalism, through complex interdependence. Realism, according to them, is based on three basic assumptions: firstly, states are coherent units and the most important political actors; secondly, force is an effective instrument of policy; and thirdly, there exists a hierarchy of issues in the world politics dominated by security questions. However, in contrast, under the conditions of complex interdependence: actors (state and non-state) participate, there is no clear-cut hierarchy of issues, and force is largely ineffective. Under these circumstances, outcomes will be on the basis of distribution of resources and “vulnerabilities” within the particular issue areas. However, Keohane acknowledged that his complex interdependence model was not necessarily an alternative to neo realism or realism. He agreed to many of the neorealist assumptions linking the creation of regimes in the areas of trade, finance and the energy oil market. He also agreed that interdependence and power were not independent of each other. Rather, it could be argued that “asymmetrical interdependence” (i.e. dependence) is a form of power relationship that exists in international relations [12]. Keohane’s book “After Hegemony: Cooperation and Discord in the World Political Economy” has been the culmination of his effort in synthesizing both structural realism and complex interdependence [13]. The fusion is well known as “modified structural realism”, best known as “neoliberal institutionalism”. Further, he went to the extent of revising the “functional theory” of institutionalized cooperation, which is based on oil, trade and finance. In spite of the absence of a formal and legal hierarchy of authority, the informal structures of governance exist in the form of regimes and “institutions” and a related complexity of rules and norms that overcome the market failures which exist in global resource and energy market [14]. The neo-realist and neo-liberals disagree to the extent how the states visualize of their own interests. For the neorealists, such as Waltz, the states are concerned with “relative gains” meaning gains assessed in comparative terms; in short, who will gain more? On the other hand, the neo-liberals claim that the states are concerned with the maximizing their absolute gains, i.e. an assessment of their own growth independent of their rivals; in short, what will gain me the most? The neorealists justify the cause that the states will cooperate one another if they expect to gain more

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benefits than their rivals. Whereas, the neo liberal institutionalists believe that the international relations are a zero-sum game, as many states as possible feel secure enough to maximise their own interests or gains regardless of what ensued to others. Further, the mutual benefits accrued from cooperation are possible since the states are not always preoccupied with relative gains [7]. However, liberal institutionalists acknowledge that the cooperation between the states is likely to be fragile, particularly where the enforcement procedures are weak. According to Rosecrance, the growth of economic interdependency has been matched by a corresponding decline in the territorial aggression by the states, and the benefits of trade and cooperation among the states greatly exceed military competition and territorial control [15]. But, for the neo-realist Grieco (1988), economic interdependency will never take precedence over strategic security interest since states are primarily concerned with their survival and security. Interdependence does not eliminate hegemony and dependency in interstate relations as power is unevenly distributed throughout international trade, investment and financial markets. The neo-liberal institutionalism contributes a science of international interdependence, a study of the relations between the state and non-state actors in an anarchical environment of world politics [16]. Countering “high politics” and supporting to “low politics”, Richard Rosecrance, the liberal, argued that the balance of trade has supplanted ideological confrontation and balance of power, and thus the establishment of “commercial liberalism” [17, p. 114]. Also, for details, refer to Rosecrance, Richard, 1987. The Rise of the Trading State: Commerce and Conquest in the Modern World, New York, Basic Books. He did not say that interdependence will necessarily overshadow the logic of territoriality. But, on a balance, he predicted that the future of international relations will be marked by a shift in states’ priorities from the logic of military competition to the logic of trade cooperation and interdependence. Since the World War II, the benefits of trade have arisen in comparison with the costs, and the oil-producing states understood the advantages of such market in spite of having a spate in US-Soviet Union rift. While he did not rule out the possibility of military confrontation and nuclear war between the nations, he was hopeful that the responsive nations are capable of change and can adapt to the necessities of “trading state”. The collapse of the ideological confrontation between capitalism and socialism has been replaced by the hegemony of the world market, i.e. the only “civilization” begun in the 1990s. In his recent arguments, Rosecrance pointed out that the world is now in an era of “virtual state”. The “virtual state” does not try to increase its territorially based productive capabilities; rather, like a giant corporation, it invests in services and people. In successful virtual states, the traditional demands for advanced democracies such as high government spending, more social benefits and larger deficits, have to be subordinated to the demands of the international marketplace such as rising productivity, a strong currency, low inflation, flexible and trained workforce. Although the virtual state is the emerging market force, yet the commercial liberalism will dominate international relations in future because of the existence of a large number of developing and underdeveloped nations in the world [17, pp. 118–119]. Like realism and neo realism, the liberals or the neoliberal institutionalists believe in the behaviour of the nation states, which are unintended, reciprocal and often

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negative in effects [18]. All the countries or a group of countries have a common interest in finding solution to the existing or emerging problem and resolution of those through a collaborative effort. However, actors may fail to cooperate even through their interests are purely identical [13, p. 65]. Barriers exist in one form or the other, which are largely due to the political inclination of the nations, geopolitical changes and economic pursuits. As a consequence, the game theory or game turns as an option for nations involved in the system. Game theory, many times, proves itself as a supplementary to realist and liberal approaches. It differs from realism and liberalism in the sense that it is concerned with the processes of nation-state decision making, rather than being involved in the totality of global geopolitics. It has been used by both the realists and the liberals to explore and explain conflict and cooperation and has been very useful in the study of deterrence and alliance formation [19]. Derived from rational choice theory, mathematics (and logic) and economics, the theory is interested in the rationality of decision making. Rationality, here, does not refer to the “rationalism” of the Grotian tradition and the English school, nor does it mean correct, good or wise. It is not about assessing the content of a player’s goals; rather, it is interested in outlining how human beings justify their order or reason while obtaining the goals they prefer, and maximization of preferences or interests, i.e. best explained as “utility function” [20]. The game theorists have developed a wide range of games for analysing different strategic situations in international relations. Broadly, the games can be divided into chicken, stag hunt and prisoner’s dilemma. Most of the times, the countries reject chicken game since it is of high cost with big uncertainty. Both in the stag hunt and prisoner’s dilemma, the actors lack sufficient information about one another’s true preferences. A player state may fear that the other states will cheat it by taking advantage of its cooperation. Cooperation prevented even if all actors involved recognize that they have a common issue and the cooperation would be the best solution to the problem. A country may prefer to prevent others from free riding off their cooperative efforts, or the nations may wish to avoid the transaction costs that a cooperative deal might involved. Information and communication gap, insecurity, lack of trust and situations play larger roles for the games. Since the emerging political economy of energy is characterized by an increasing diversity in energy technology, trends towards deregulation and foreign investments, a great sense of interdependency has developed among the nations for this resource. Theoretically construed, the international interdependence structure explains the patterns of interdependence among different states. P. Andrew-Speed introduced “schematisation of international oil interdependency” [21], which is explained through different categories: first, countries although export and invest in finance and technology sectors, yet imports energy. For example, the USA, South Korea, Japan and the most of the European countries like Belgium, Germany, Spain, Italy and France; second, countries exporting oil and natural gas, along with finance and technology. The countries in this category include Norway, the Netherlands and Denmark; third, countries exporting oil and natural gas, while importing capital in the form of technology and finance. The majority of the hydrocarbon producing countries including the OPEC countries, the countries across the Caspian and Central

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Asian region such as Turkmenistan, Kazakhstan, Uzbekistan, Azerbaijan and Russia; fourth, countries importing hydrocarbon, technology and finance together. The developing countries under this category include South Asia, South-East Asia, East Asia, South and Central America and Africa. The political economy of energy, as mentioned above, is largely interpreted under the fulcrum of International Political Economy (IPE). This approach is an attempt for the critical evaluation of the rationalist economic theories and gives importance to economic values like liberalism and nationalism. The arguments are basically derived from Susan Strange, British political economist who largely established international political economy. In her opinion, economic resource sectors cannot be interpreted purely on quantitative terms. The oil shocks in 1970s were largely provoked by Israeli-Arab conflict of 1973, which cannot be incorporated into economic modelling without incorporating politics. And thus, she criticized the existing theoretical barriers between the three major social sciences—Economics, Political Science and International Relations and stressed the need to analyse energy security, both from economic and political perspectives. Her structural approach to the international political economy is all inclusive of global political and economic behaviour of nation states, organizations and other socio-cultural and economic aspects. She defended four primary structures, namely security, finance, production and knowledge, which largely constituted the basis for structural power of the international players or actors for scarce natural resources [22]. Accordingly, security implies security of energy supply and intervention for energy security; finance in oil trade and investment and energy infrastructure; and production includes exploration and exploitation of resources; and knowledge in the technological development for energy efficiency and environment protection. In her opinion, electricity and gas liberalization in the USA constituted the very basis of “new energy security scares”. She explained it well from two counts. First, the electricity liberalization referred to the Californian Crisis (2001), caused by the inability and unwillingness of the private sectors to provide long-term power supplies for electricity generation, which is best explained as “Californian syndrome”. Second, in the context of gas security, hyper liberalization led the companies not to comply with legally binding gas storage requirements because of severe competition with the downstream gas companies [23]. Hence liberalization gave a new but contested dimension for political arguments over the role of the private sectors in meeting domestic requirements, and guarantee of energy security. But in the international market today, particularly within the OPEC, the MNCs role have been declined and the major oil and natural gas companies are state-regulated, and the behaviour of the state matters more in the global energy market. Looking into all these theoretical frameworks, it is apt to highlight on India’s energy geopolitics in the international relations. India, although followed democratic socialism during 1947–1991, had very cordial relations with all the oil exporting countries in the world. Since India was in favour of Palestinian independence, New Delhi garnered support from the major oil exporting countries like Soviet Union and West Asian countries. The principle of mutual economic interdependence was devoid of ideological and political confrontations in the global level. With the beginning of

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new era of economic liberalization in India in 1991, India has been largely following the principles of liberalism in its energy trade and investment and strengthened its relations with the global regimes and institutions in the oil and natural gas sector. India has been closely working with the World Trade Organisation (WTO) policies on trade, OPEC norms on energy trade and IEA approaches. While India wants reform in WTO, consistently working with the OPEC to keep the crude oil price favourable to developing and major oil importing countries and consistently asks it to price the oil responsibly, so that balances interests of both producers and consumers.1 Pertinent to mention that the OPEC regime accounts for 83% of India’s global crude oil imports, 98% of its Liquefied Petroleum Gas (LPG) imports and 74% of its Liquefied Natural Gas (LNG) imports during the financial year that ended on March 31, 2018.2 India, neither believes nor works with the theories of realism and neo realism since New Delhi is not in favour of playing a dominating role in world politics based on realpolitik. It does not mean that India has not faced energy insecurity issues and geopolitical challenges. However, India, under these crisis junctures, has followed three major approaches: approach to the world community for early resolution of crisis; diversification of suppliers; and domestic managements. No doubt, as the liberals argue, democratic issues, corruption, and political instability, hampers the very nature of energy security in the energy-rich countries in the world. Situations in Venezuela, Nigeria, Angola, Chad are the burning examples in this context. India is facing odds in its energy trade with Iran, Venezuela and Russia because of changing geopolitical dynamics largely accrued from Washington’s bitter relationship with these countries. In past, US attack on Iraq on the grounds of weapons of mass destruction and dictatorship disrupted India’s oil import from West Asia. The ongoing civil war in South Sudan is the reminder, what the liberals argued, that the economically underdeveloped and little interdependent nations are volatile for trade and investment. Along with internal civil war, law intensity war between Sudan (also an unstable country) and South Sudan have brought India’s energy trade with these countries virtually a halt. Both the liberal countries India and America had common approach to UN sanctions on Iraq and Iran in past, but in recent years, it showed its reluctance to walk together on USA and its allies sanctions on Iran and Russia since both the countries are strategically very significant for India and these sanctions have no UN mandate. On Venezuela, USA wants New Delhi to reduce its crude oil import from that country, but India is adopting wait and watch policy on the ongoing internal politics in Venezuela. Further, India and China have common interest in the global energy market as major consumers. Yet, their cooperation ends up, in spite of having some mutual arrangements, when they go for competitions with each other in the oil assets abroad, which have been discussed in the subsequent chapters.

1.2 Geopolitics for Energy Security For a long period, energy security has often been a dynamic component in energy policy discourse. This can be well explained how British Prime Minister Winston

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Churchill or Georges Clemenceau regarded oil supply security as essential to fuel their armies for World War I and II and how Churchill was ready to shed “a drop of blood for every drop of oil” [24, p. 374] and ordered the marine engineers to convert the coal-based engines to diesel-based ships and submarines so as to give a fitting reply to powerful naval forces of Germany. More to mention, controlling the oil supply route was a major aim for the major powers during the war periods. For example Germany and Japan attempted to choke oil supply routes to USSR and allied powers in the South East Asian region during the war period [25]. Of all these periods, energy security posed as a vital dimension to national security where the secured supply of oil was the necessity to fuel fighter planes, warships, tanks, etc. Congruence to these global security dimensions and geopolitical developments after the wars, the world energy demand increased rapidly which was basically driven by America, Western Europe, the Soviet Union and Asia later. The international oil supply gradually controlled by the major global oil companies. However, the monopoly of the oil majors created discontent between the oil majors (companies) and the countries of oil production. The 1950s was very crucial in oil geopolitics and intervention of super powers for energy security. Most crucially, the Mohammad Mosaddegh government of Iran was overthrown with the support of Central Intelligence Agency (CIA) of USA and Secret Intelligence Service (SIS) of UK since it fought against external interference in domestic matters, and nationalized the Iranian oil assets and industries.3 The hiccups between the oil multinational companies and oil-producing countries, and the tussles between the countries of production and suppliers, finally resulted in the establishment of OPEC in 1960 with the intention of establishing a wellregulated and stable energy market [26, pp. 1–28]. Yet, the 1970s turned to be the beginning of an era of energy insecurity, caused by global geopolitical dynamics. The oil crises happened, and energy was used as a foreign policy tool to avenge. In 1973, Arab countries-imposed oil embargoes against the USA and its allies because of the second Arab–Israel War and western support to Israel. Many Arab and OPEC countries gradually nationalized oil assets of USA. Although the oil embargo was for a short period, oil price, during and after crisis, increased sky rise, and thus the major oil-importing countries initiated various countermeasures in the form of investment in energy, diversification of energy resources and import destinations, energy efficiency and stockpiling measures. Therefore, the International Energy Agency (IEA) was set up in 1974 by the Organization for Economic Co-operation and Development (OECD) countries so as to have a larger say on global energy consumption market and energy security turned as a high priority subject in the agenda setting and policy making of various countries [26, pp. 6–8]. Significant to note, that during the Cold War period, President Jimmy Carter of the USA under the “Carter Doctrine” declared, “An attempt by any outside force to gain control of the Persian Gulf and the Arabian Sea will be regarded as an assault on the vital interests of the USA and will be replied by any means necessary including military force” [24, pp. 373–389]. The end of Cold War and the post-Cold War developments in 1990s witnessed the trend towards privatization and liberalization of energy industries and better integration in the global energy market. The national oil companies of the major

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oil-producing regions or countries continued expanding their integration into the oilimporting countries. For the first time, the energy-consuming countries such as nonOECD and developing countries increased energy import due to domestic requirements and economic growth. However, the climate change and global warming issues caused in various global conferences and convections for the reduction of carbon emissions and thus reduction of fossil fuel consumption. Important steps in this regard included Montreal conference, Basel Convention, Earth Conference, Johannesburg conference, Kyoto protocol, Copenhagen conference, and Paris Convention (COP-21). Yet hydrocarbon in the form of oil and natural gas is the major source of energy in the global energy trade, investment and consumption patterns, and energy insecurity still prevalent in one form or other. The Gulf War-I and II (1990–1991, and 2003), the 9/11 terror attacks (2001), Arab Spring (early 2010s), insurgency of Islamic State (2014), civil wars within the countries, piracy, sea-lane security, risk of chokepoints, international sanctions have raised concerns over the security of energy trade and safety of energy infrastructure. The energy security concerns have also been expanded beyond oil supply; oil supply today is used as a tool of foreign policy and diplomacy—both for the oil exporting and importing countries. The Ukraine gas crises in 2006, 2009 and 2014 was largely an outcome of Ukraine’s tilf towards USA and its allies, and Ukraine’s possible membership in the North Atlantic Treaty Organisation (NATO). Some countries criticized energy as a tool of the Russian foreign policy to blackmail the oil-dependent countries. This crisis is also a reminder of the transit risk, mainly for the European markets. This is the reminder of what the Arab countries did against the USA and its allies in the Arab–Israel War (1973). In the context of other factors like, displacement, deprivation and exploitation in the oil-rich localities of a nation also add new dimensions to energy security, which is best described with the concept “oil curse” in local and global geopolitics.

1.3 Energy Security—A Wider Connotation Energy security or the security of energy, according to the International Energy Agency (IEA), meant the uninterrupted availability of energy sources at an affordable price. Accordingly, energy security has two broad aspects: Firstly, long-term energy security, which basically deals with timely investments to supply chain along with economic developments, environmental requirements and alternative energy resources, and thus reduce oil import dependency. Secondly, short-term energy security, which delivers efficiency and promptness of the energy flow to react instantly to the immediate crisis occurring in the demand–supply balance. In the international oil market where prices are allowed to adjust in response to changes in supply and demand, the risk of unavailability of resources is limited to extreme situations only. However, the oil supply security alone is no longer sufficient for understanding a country’s energy security situation as a whole. And thus, energy security, as expressed by IEA, includes energy infrastructure as an integral aspect of energy security, and collective ability of the countries to respond the serious oil supply disruptions.4

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Energy security is a concept that has various meanings and implications for different countries—depending on their geographical location, natural endowments, level of development, political systems and international relations [27]. From the policy and research discourse, the concept of energy security has been defined and debated largely. Thus, different dimensions have been associated and integrated with the concept of energy security. Apart from efficiency, equity, environment and geopolitics, there are five “Ss” to elaborate energy security—Supply, Sufficiency, Surety, Survivability and Sustainability, but this influential approach of Five “Ss” does not address three broad questions: “Security required for whom?”, “Security required for which values?” and “Security required from what threats?” [28]. The Asia Pacific Energy Research Centre (APERC) has defined energy security through four “As”— Availability, Accessibility, Affordability and Acceptability [29]. Whatever might be, the Five “Ss” and Four “As” deal public intervention in the energy sector with relation to development of economy, distribution of wealth within the country and among the nations, and thus international security under global power structure and system. Since the energy requirement and situations varies in each country and each region, the actual policy or risk management mechanisms are wide ranging in nature, namely: diversification of supply, sources and demand, security enhancement, stockpiling, demand control (energy efficiency), pricing and vertical integration. There are four major characteristics of energy policy to ensure energy security which can be contextualized here. First, rapid decarbonization, demand reduction and improved efficiency are needed for the developed world, as well as improving energy efficiency and low carbon sources of energy supply for transition economies, securing sufficient energy and the improvement of living standards for emerging economies, providing universal energy access and creation of sustainable energy systems for the developing countries in general. Second, energy policy itself evolves, depending on pressing issues and external changes, and the quantum of security can be provided or improved over the time. Energy security is not always the first priority but USA is an exception in today’s hydrocarbon market. As the shale revolution is expected to turn the USA into a net exporter of energy, the US dependency on supply has reduced and the security of demand aspect within the country has emerged. Third, there is no clear-cut energy security policy distinction between producing and exporting country on the one hand, and consuming and importing country on the other hand, since all these countries produce and consume energy to a varied extent. Sometimes dilemma developed, whether the security of supply is the priority or the demand. A large number of energy exporting countries face this dilemma, since their domestic energy demand is increasing rapidly [30]. Fourth, climate impact and sustainability of energy is getting momentum in global affairs. Therefore, the relationship between energy security and climate policies is well calculated to ensure and enhance sustainable energy security, while ensuring climate security [31]. For example, the most recent exploration of unconventional hydrocarbons such as shale energy which requires a large quantity of water also contaminates water and soil. Likewise, Arctic energy exploration has drawn criticisms because of “compromise” with the Arctic flora, fauna and overall Arctic ecosystem and global climate. Hence, there is an imperative

1.3 Energy Security—A Wider Connotation

13

need for a more and effective balanced approach to the two issues—climate versus energy and sustainability versus security. The concept of energy security is interpreted by various countries and organizations through different paradigms. The three pillars of the European Union’s energy policy include efficiency, sustainability and security of energy supplies. Just before his election as the President of the USA, Barack Obama indicated the need for national commitment for energy security, and urged for the establishment of the Director of Energy Security in the country to oversee American energy interest.5 In the USA, the focus for energy security has been on the reduction of vulnerability to political pressure, which has led politicians and think tanks to speak for energy self-reliance and increasing of shares of other sources of energy such as shale energy. In the case of developing countries like India, energy security encompasses issues related to access and equity since security of energy at household and individual levels is inextricably linked to overall human development. As has been recognized by the United Nations Development Programme (UNDP), “none of the Millennium Development Goals (MDGs) can be met without major improvement in the quality and quantity of energy services in Developing Countries (DCs)”. In these countries energy security is defined and interpreted as energy independence, while advocating an increase of imports of fossil fuels, and resource diversification. Energy security is also variously interpreted in political acumen and national interests in the form of “protection against commodity price volatility”, “protecting the economy against the disrupted energy supplies”, “reliability of fuels”, and “nuclear energy with reduced or zerohazards” [32]. The decreasing volatility of supply on the one hand and increasing cost in consumption on the other hand determines security levels. This is what the IEA said, “Energy security is the physical availability of resource supplies to meet the demands with a specific price”.6 This definition implies that, apart from supply disruptions, security can beat stake if there scarcity of energy and resulted hyper increase in the cost of consumption. In spite of several conceptual clarity on Energy Security, it is very difficult to give a definition which will be highly accepted to all the stake holders of energy. According to Energy Charter Secretariat, 2015, energy security can be best defined through four ways [26], although there are certain limitations. Firstly, ambiguous and evolving nature of the concept—despite many governments’ emphasis on the importance of energy security, there is no consensus about what energy security is supposed to mean. In other words, “where countries stand on energy security depends on where they sit” [27]. Secondly, the energy importing countries are naturally concerned about energy security of supply. For instance, the IEA defines energy security simply as “uninterrupted availability of energy sources at an affordable price”.7 However, this definition does not include any environmental and social notions and suppliers’ point of view. Thirdly, while most of the literatures interpret energy security from the oil-importing countries perspective, the oil suppliers’ are excluded from the analysis. So, equally, the focus should be on security of suppliers’ interest. Fourthly, the definition of energy security of the United Nations only concerns security of supply. According to the energy expert Daniel Yergin, there are several dimensions of energy security: Firstly, physical security, which includes protecting the assets, infrastructure, supply chains

14

1 Conceptual Frameworks

and trade routes, and making provisions for quick switch over, if required. Secondly, access to energy is critical, which implies the ability to acquire and develop energy supplies—physically and commercially. Thirdly, energy security is a system which includes the national policies and international institutions, designed to respond in a coordinated way to deal disruptions, emergencies, and helping to maintain the smooth flow of supplies. Fourthly, investment approach if there is a longer-term deal or objective. More specifically, energy security requires policies and business climate which promote investment, development and innovation to ensure adequate supplies of energy, and energy infrastructure which will be available in a timely way. Moreover, according to him, energy security can be interpreted through three broad categories: first, oil-importing countries think in terms of “security of supply”; second, oil-exporting countries talk of “security of demand”, for their oil and gas exports; and third, importing but powerful countries like the USA who interpret energy security more often in terms of “Energy Independence” to fulfil their global interest, and the role [33].

1.4 Energy Security—An Indian Perspective As discussed above, energy security meant different things in different places under different situations over a given period of time. Energy security, in the Indian context, is to supply lifeline energy to all the citizens to meet their effective demand for a safe and convenient energy at affordable cost. The “Hydrocarbon Vision 2025”, published in 2000 by the Government of India, has set out India’s energy security predicament. The report envisioned that India would ensure energy security “by securing self-sufficiency through increased indigenous production and investment in oil assets abroad” [34]. The 12th Five Year Plan of the government of India8 states that “energy security involves ensuring an uninterrupted supply of energy to support the economic and commercial activities necessary for a sustained economic growth of the country”. Through a broader perspective, the Planning Commission of India (now NITI Aayog) defines energy security, “India is energy secured when the country can supply lifeline energy to all our citizens irrespective of their ability to pay for it, as well as meet their effective demand for safe and convenient energy to satisfy their various needs at competitive prices, at all times, and with a prescribed confidence level considering shocks and disruptions that can be reasonably expected”. And thus the various elements of this definition include: “all citizens”, “lifeline energy”, “effective demand”, “safe and convenient energy”, “competitive prices”, “all times”, “various needs”, “prescribed confidence level”, “shocks and disruptions” and “reasonably expected”. This can be further simplified and clarified through various perspectives. First, energy reaches to all the citizens of the country. Second, it is vital to ensure “lifeline” energy to all people irrespective of their capacity to pay. Energy up to a certain level is a basic necessity. Since energy is a basic necessity, lifeline energy consumption has to be made, even through the subsidies, and target the projected beneficiaries. Thus, energy security intends to fulfil lifeline energy needs of the

1.4 Energy Security—An Indian Perspective

15

nation. Third, effective demand means the ability of the rich and the poor to pay at market-determined prices. Fourth, if energy demand is not met at an affordable price, the competitiveness of the Indian economy will be at risk. Fifth, safe and convenient energy so as to avoid air pollution, health hazard, etc., particularly keeping in mind the safety of old people, children and women. Sixth, energy is required in different forms to meet different needs. Energy in one form cannot be easily substituted by other forms and any substitution will cause cost or loss in the deliverance of quality service. Seventh, energy should be available at all times. Interruptions in energy availability can impose high costs on the economy and human well-being. Eighth, there is the need that the country should be ready to withstand shocks and disruptions in the global energy market. But one can expect supply only within a prescribed confidence level during these situations.9 Given the various interpretations of energy security and the divergent imperatives, energy security for India has three sets of linkages, according to TERI—The Energy and Resources Institute. Firstly, energy and economic growth, where energy is required to meet the objectives of the economy; secondly, energy and poverty, where the basic energy needs provided and accessed by all the sections of the society for an equitable growth; and thirdly, energy and the environment, where the adverse environmental implications of energy exploration, and the demand for energy consumption are proportionately addressed and resolved. Moreover, a long-term view of supply of all energy sources, both conventional and non-conventional, is taken into account by the government and policy makers. This approach is not just limited to analysing the supply side; rather refers the factors which have been affecting the demand for energy and energy efficiency in key consuming sectors and policies on demand side efficiency. This helps in evaluating the economy of energy consumption and production through a bottom-up analysis of demand and supply sectors [35]. All these arguments and aspects of energy security have been well reflected by the Indian Prime Minister Narendra Modi, who identified Four Pillars of India’s energy future: Energy Access, Energy Efficiency, Energy Sustainability and Energy Security.10 Dr. A. P. J. Abdul Kalam, the former President of India, in a speech focused on taking of necessary steps to ensure energy security in India. Accordingly, efficiency of cutting down losses and taking a more synergistic approach towards consumption patterns and tapping of all the energy sources at the local, regional and global level will lead to energy independence and total freedom from pollutions for all the people in the planet.11

1.4.1 Growth of India’s Oil and Natural Gas Sector After the independence, the oil industry of India was largely controlled by the Britishowned Burmah, which had a joint venture with Shell to form Burmah-Shell and the American companies Caltex and Standard Vacuum. These companies were importing oil from their fields in the West Asia region and thus from the 1940s to the 1960s, most of India’s imported oil were transported from Iran and Saudi Arabia, with smaller

16

1 Conceptual Frameworks

amounts from Indonesia and Kuwait [36, p. 202]. The western oil companies also owned most of the oil refineries in India. Until the early 1960s, all four refineries in India were foreign-owned, and in the late 1960s, foreign ownership was still considerable. For example, in 1967, of the nine refineries in India, five drew supplies from abroad, and only 5.7 million tons of a total of 14.4 million tons of India’s crude consumption came from India’s public sector refineries [36, pp. 184–187]. During the 1960s, India practiced socialist economic policy or democratic socialism where India inclined towards the Soviet Union and thus there were the changes in India’s attitude towards the oil suppliers. India signed agreement with Russia to import Soviet oil at prices below the prevailing international market. Therefore, differences and disputes developed between India and the western world on oil pricing and refining. The western oil companies refused to refine the Russian crude. Out of this trouble, the Indian government indigenously built public sector oil refineries with the Soviet and Romanian support, beginning in 1962. Thereafter, India banned Western oil companies from expanding their refineries in India. The Burmah-Shell and Caltex refineries nationalized, the Indian Oil Corporation (IOC) was given monopoly on oil imports [37]. All these developments indicated a sense of India’s step towards self-reliance on energy sector and decrease of Indian dependency on western technological cooperation in oil exploration and refining. In 1977, Russia supplied crude oil to India under the basket of currencies where Indian currency rupee was counted. During the period of 1977 to 1982, Soviet Union accounted for 5–15% of India’s oil import, and the share increased to 23% by the Mid-1980s due to Iran–Iraq war. More to say, by 1984, of the total 10 public sector refineries built in India, three were established with the Soviet assistance that counted for 16 million tons of India’s total refining capacity of 34 million tons, and two were built with Romanian assistance [38]. However, the economic crisis in Russia in 1990s urged India to look assertively for other destinations of energy resources in the global energy market. Unlike oil, India was not a major consumer of natural gas energy till mid1980s when the natural gas explored from Bombay High. Because of increasing demand for more natural gas resources and its low availability, India started importing gas in 2004 through tankers and maritime shipping. India’s first LNG imports were from Qatar in 2004, and subsequently from Iran, Russia, Turkmenistan and African countries. In contemporary times, the Indian government has come up with several pipeline proposals such as Turkmenistan–Afghanistan–Pakistan– India (TAPI), Iran–Pakistan-India (IPI), Russia-China-India (RCI) and Myanmar– Bangladesh–India (MBI). Apart from these trans-continental pipelines, there have been options for constructing pipelines through the maritime routes, such as Iran– Oman–India pipeline. By 2005, gas comprised 8% of India’s commercial energy consumption [37, p. 330]. India has tried to enter the LNG shipbuilding business. For example, GAIL has sought nine LNG vessels to transport US LNG, with the caveat that one out of every three vessels was to be built at an Indian shipyard. In the current scenario, the government plans for the reduction of India’s consumption of oil, and scale-up the gas component in the energy basket, i.e. from the existing 6.2– 15% by 2020, and 20% by 2025, which is central to the Ministry of Petroleum and Natural Gas (MPNG) of the Government of India.12 The current share of natural gas

1.4 Energy Security—An Indian Perspective

17

in India’s consumption pattern is significantly lower than the world average, i.e. 24%, and according to Dharmendra Pradhan, Indian Minister of Petroleum and Natural Gas, “India is working to increase this statistics from 6 to 15% by 2030” [39], and thus, India is ready for a surge in gas consumption. The demand for natural gas is largely because of India’s quest for resource diversification, international responsibility for reduction in carbon emissions, and affordability; for example, in 2014 LNG price was about $15–18/MMBTU, and today, it is very affordable and reasonable [39]. Further, the decline of production in Krishna Godavari Basin-D6 (KG-D6) has necessitated for more LNG requirements. About 25 GW of gas-based power plants are more or less stranded with near to no hope of revival. And thus, India is looking for natural gas energy market, import of LNG and energy infrastructure development before opening up gas supplies, and policies thereupon [40]. In 2015–2016, India imported 16 million tonnes of LNG and some predictions revealed increase of 50 million tonnes import in 2030 [41] and turning to become world’s largest LPG import market in the coming years. Overall, the natural gas production in India is not declining; rather stable. So, government has started a reform in the energy sector, invested about $30 billion to develop gas fields in the country which will be operational in 2020, and by 2025, the production in gas fields in India is expected to double [39]. This is in congruence to what the global development scenario of 2020–2025 forecasts that most of the global investments in the development and production will go to natural gas projects than the oil resources. Although oil and natural gas constitute a major role in Indian geopolitical fervour, yet the demand for clean energy, concerns over environment pollution, and India’s international commitment, prompts Indian policymakers to look for alternative sources of energy under its energy diversification pursuits. The world’s largest renewable energy expansion programme is launched by India and by 2022; it is intended to achieve 175 GW renewable energy (RE). The 82, 588.95 MW (82.58895GW) installed capacity of RE by 31 Oct 2019 constituted 22.67% of the India’s energy basket.13 Significant to note here, in the last four years starting from 2013–2014 to 2017–2018, the RE installation growth in India doubled 35,000 MW (35 GW) to 40,000 MW (40 GW). With regard to RE production, there has been a progress from 2.6 GW in 2012 to more than 12.2 GW by the end of 2019. In the solar sector, the installed capacity has increased by 370% in the last 3 years and set to achieve 100 GW by 2022. Solar capacity has increased by over 8 times in the last four years, from 2630 mw (2.63 GW) to 22,000 MW (22 GW). Likewise, India’s installed wind capacity in 2017–2018 had increased to 34,000 MW (34 GW), which is a 1.6 times increase of 21,000 MW (21 GW) in 2013–2014.14 Further, an Offshore Wind Policy has notified for 1000 MW (1 GW) energy installation capacity. The expensiveness of equipment that hindered the affordability scope of the public has been reduced so as to make renewable or solar energy cheaper. For example, solar power tariff has been reduced by more than 75% using plugs and play model. Solar park scheme has been doubled from 20 to 40 GW, solar tariff reduced to Rs. 2.44 per unit, and solar pump installations increased 9 times, i.e. 11,600 in 1991–2014 to 1.1 lakh in 2014–2017.15 From all these RE discussions, it is clear that India is making a stride in this sector; installed capacity is high but the production does not match to the

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1 Conceptual Frameworks

installation capacity. No doubt, in future, there will be more demand for RE, but it could not replace the oil and natural gas requirement; what it will do compliment to hydrocarbon energy resources so as to reduce oil and natural gas consumptions and low carbon emission.

1.4.2 Energy Requirement and Policy Perspectives Since 1990s India today is one of the fastest-growing and large economies in the world. Since 1991, and specifically during the period between 2005 and 2015, the country’s Gross Domestic Product (GDP) has increased at a compound annual growth rate (CAGR) of about 7%. During 2005–2015, India’s primary energy consumption increased at a CAGR of 6.7%, from 394 million tons of oil equivalent (MTOE) to 700 MTOE. From the supply side, oil and natural gas are major sources of primary energy in India, accounting for approximately 45% share in India’s primary energy basket.16 India has just 0.3% of the world’s proven oil reserves, while accounting for 4.5% of the global oil consumption, thus importing about 80% of its oil requirement. Likewise, the country has 0.8% of the world’s proven natural gas reserves, but accounting for 1.5% of the worldwide gas consumption, and thus importing nearly 40% of its natural gas requirement every year.17 Every year, the country consumes about 240 million tons of oil having its own production six times less and produces less than the half of the required 58 billion cubic metres of natural gas, and thus, India imports the difference. The International Energy Agency (IEA) predicts that India’s crude requirement will increase to 7.2 mb/d by 2040, and thus, India will import a total of around 2.3 mb/d in oil products by 2040, and by that time, its market will constitute more than a quarter of the growth of the global energy demand.18 India imported 213.9 million tonnes (MT) of crude 2017 fiscal, about 78% of its demand [40]. If the global fossil fuel supply increases by only 1.7%, as projected by IEA, then India’s share in 2030 would range from 5.8 to 8.0% for oil, 2.4–4.5% for natural gas and 16.7–26.5% for coal.19 The demand for crude oil in India increased from 203 MT in 2015–2016 to 214 MT in 2016–2017, registering a growth rate of 5.5% compared to the global average growth of 1.6%.20 According to BP Statistical Review of World Energy, June 2016, India has surpassed Japan to become the world’s thirdlargest oil consumer after the USA and China, with its consumption of 4.1 million barrels per day, the USA 19.39 million bpd and China 11.96 million bpd.21 By the mid-2020s, according to BP Energy Outlook, India will overtake China in terms of its energy consumption [39]. Country’s domestic consumption and fast-growing economy prompts International Energy Agency (IEA) statistics, “India in order to stay on its current growth trajectory, will have to increase its energy consumption by at least 3.6% annually which will lead India’s hydrocarbon demand to double by 2025, compelling it to import 90% of its petroleum supply” and by 2050, the country is likely to be the world’s single largest importer of oil [34, 42].The India Energy

1.4 Energy Security—An Indian Perspective

19

Outlook, 2015, published by the IEA, looked at India’s role in reshaping the global energy market, because it was set to contribute around a quarter of the total energy demand. Taking into account the fast-growing requirements for more hydrocarbons, the energy security possess as one of the top priorities of the Indian government. In the recently concluded International Energy Forum-16 (IEF-16), 2018, New Delhi, Prime Minister Narendra Modi revealed that India’s overall energy consumption will grow 4.5% every year for the next 25 years.22 Today, the oil and natural gas resources constitute the largest imported commodity, accounting about 37.5% of India’s total imported goods [34].Further, India’s requirements of fossil fuels for the year 2031– 2032 based on the scenarios is projected to be 337–462 Mt of oil, 99–184 MTOE of natural gas.23 Today, the natural gas is slated to play more important role in the global as well as in India’s energy mix, most specifically being a clean fuel, and the global natural gas reserves are inadequately unexploited. India’s Hydrocarbon Vision 2025, issued by MPNG, calls for natural gas to be India’s preferred energy resource since it is more efficient and cleaner than coal and oil.24 In 2016, the IEA estimated that India’s gas demand is set to grow almost 6% annually between 2015 and 2021, and that overall gas demand will reach to the level of the USA by 2040.25 However, it is not convinced how the natural gas will substitute either coal or oil by 2035 in the total energy mix [43]. Till date, India has been largely dependent on coal for electricity generation, while compared to gas which is very limited in its availability. India significantly relies on coal consumption and almost doubled over the past ten years to 407.2 MTOE in 2015. Unlike coal and oil, the need for India’s natural gas requirements has been so limited due to lack of availability. The country basically depends on its domestic production, which in 2015 stood at just over 29 BCM— down from a high of almost 50 BCM in 2010—while total proved reserves in 2015 stood at 1.5 TCM.26 The prospect of demand for the natural gas seems very high in India. Like IEA, the BP Statistical Review of World Energy finds huge demand for gas resources in India. In the country, the gas demand will grow by as much as 155% by 2035.27 Today, India is the fourth largest LNG importer in the world, and the discovery of natural gas hydrates in the Bay of Bengal in the Indian Ocean in July 2016 could be the game changer for the Indian energy needs. The findings by ONGC, the US Geological Survey, and teams of scientists from Japan in the Indian Ocean and Indian territory are the first of their kind in the region to explore gas resources; and if producible, the potential resources in the region will significantly alter India’s quest for natural gas. However, because of India’s lack of infrastructural facilities to import gas through pipelines and low domestic production, the country’s demand for natural gas will remain weaker at least in the medium term, and the gap between the supply and demand for natural gas in India is likely to increase since the economic growth continues to rise rapidly in the country [44, pp. 253–254]. There are also some pressing issues and new trends which compel India to look for more and more quantum of gas for clean and efficient use of energy, minimization of pollution, replacement of wood fuels with gas connectivity to households, and the city gas distribution. All these demands and requirements prompt India to look for more natural gas resources in the international energy market.

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1 Conceptual Frameworks

The oil, along with natural gas, is a strategic resource where critical intervention is of imminent necessity for policy makers, diplomats, think tanks and scholars in India. In the words of the former president of India Dr A. P. J. Abdul Kalam, “The quest for energy security in India is the second only in the scheme of things after food security”,28 and since 1990s, the quest for energy security has become an important element of Indian diplomacy, strategic discourse and geopolitical relations. To a step ahead, India’s former Minister of Petroleum and Natural Gas, Mani Shankar Aiyar, equated energy with country’s national security [45]. The hope and promises for energy security in India is appealing, yet for a supply-dependent country like India, energy security is no longer a mere desire, but a critical imperative to be met. Even if more energy resources are explored within its territories, the country would have to look abroad for energy needs. To meet energy requirements, India is pursuing various approaches and strategies most prominently: diversification of destinations and resources; investment abroad in energy assets; encouraging the Indian companies to adopt and execute a comprehensive global vision in their pursuit for hydrocarbon resources. The international component of India’s hydrocarbon security has led much concern abroad, both in foreign policy discourse, diplomacy and geopolitics of energy security. This synchronizes what India’s decision makers believe “energy-insecure country will be unable to take a rightful place in the global stage as a great power”.29 The historicity of India’s energy policy has been somehow fluctuating, and before 1991, it was not a significant component in its foreign policy discourse. The early phases of India’s foreign policy, the colonial legacy, domestic factors like socialist economic and international factors such as India’s stronger ties with the Soviet Union had influenced and limited India’s choice of suppliers at the international level [46]. But after economic liberalization in 1991 and since 1990s, the expanding growth rate of Indian economy has obligated Indian policymakers viewing energy as a security issue, and the concept of energy security increasingly entered to the foreign policy discourse and security aspects of India. To accelerate Indian investment, acquire hydrocarbon assets and streamline energy trade, the Oil and Natural Gas Corporation (ONGC) has set up ONGC-Videsh Limited (OVL).Like OVL, the International Cooperation Division (ICD) of the MPNG is intended in ensuring and strengthening India’s energy security by continuing and promoting engagements with foreign countries and international organizations in oil and gas sector. In this context, the government is encouraging oil companies to aggressively pursue opportunities to acquire oil and gas assets abroad. India’s oil Public Sector Undertakings (PSUs) are being encouraged to adopt a global vision in their quest hydrocarbon assets abroad. In this perspective, the ICD provides a comprehensive international template and framework along with active diplomatic support to Indian oil PSUs. India has investment in 28 countries abroad for oil and natural gas assets or projects (Table 1.1). In most of the cases, it has owned the operational rights, while joint operations in others. Russia, Myanmar, Brazil, Colombia and Azerbaijan are the countries where India has largest investments. Recently India invested in Namibia, and huge discoveries in Mozambique poses bright prospect for Indian investment. To enhance India’s equity investment abroad, some of the significant Indian foreign

1.4 Energy Security—An Indian Perspective

21

Table 1.1 India’s overseas projects and investments by the end of 2018 Sl. no.

Country

Name of the project

Participating companies and their shares (%)

1 2

Australia

Block EP-413 (Onland)

BPRL-27.803

Azerbaijan

ACG, Azerbaijan

ONGC Videsh-2.7213, BP-36 (Operator), SOCAR-12, Chevron-11, INPEX-11, Exxon-8, StatOil-8, TPAO-7, ITOCHU-4

BTC Pipeline (1760 km), Azerbaijan

ONGC Videsh-2.36, BP-30.1(Operator), SOCAR-25, StatOil-8.71, TPAO-6.53, ITOCHU-3.4, Chevron-8.9, INPEX-2.5, ENI-5, TOTAL-5, Conoco Philips-2.5 Progress Energy Canada Ltd.-62, Sinopec-15, Indian Oil-10, Japex-10, Petroleum Brunei-3

3

Canada

Pacific Northwest LNG Project

4

East Timor

Block JPDA 06-103

BPRL-20

5

New Zealand

Block-14TAR-R1

ONGC Videsh-100

6

Sudan

GNPOC, Block 1, 2 and 4, Sudan

ONGC Videsh-25, CNPC-40, Petronas-30, Sudapet-5 (Jointly Operated)

Khartoum-Port Sudan Pipeline (741 km), Sudan

ONGC Videsh-90 (Operator), OIL-10

GNPOC, Block 1, 2 and 4, South Sudan

ONGC Videsh-25, CNPC-40, Petronas-30, Nilepet-5 (Jointly Operated)

SPOC/Block 5A, South Sudan

ONGC Videsh-24.125, Petronas-67.875, Nilepet-8 (Jointly Operated)

7

South Sudan

8

Mozambique

Rovuma Area-1

ONGC Videsh-16, Anadarko-26.5 (Operator), OIL-4; ENH-15, Mitsui-20, BPRL-10, PTTEP-8.5

9

Libya

Block 43

ONGC Videsh-100

Area 95–96

Sonatrach-50, Indian Oil-25, OIL-25

OPL-205

Summit Oil-30

OML-142

Suntera Nigeria 205 Ltd.-70, Suntera-50, Indian Oil-25

10

Nigeria

11

Gabon

Shakthi

Old PSC: OIL-45, Indian Oil-45, Marvis Pte Ltd.-10, New PSC: OIL-50, Indian Oil-50

12

Namibia

PEL 0037

Tullow Namibia-35 (Operator), Pancontinental Namibia-30, OVL-30, Paragon Oil and Gas-5 (continued)

22

1 Conceptual Frameworks

Table 1.1 (continued) Sl. no.

Country

Name of the project

Participating companies and their shares (%)

PEL 30

Eco Oil and Gas Namibia-32.5 (Operator), Azimuth Namibia Ltd.-32.5, ONGC Videsh-15, Tullow Namibia-10, National Petroleum Corp of Namibia (Pty) Ltd.-10

13

Iraq

Block 8, Iraq

ONGC Videsh-100

14

Iran

Farsi Offshore Block, Iran

ONGC Videsh-40 (Operator), IOC-40, OIL-20

15

Syria

Block 24, Syria

ONGC Videsh-60, IPR International-25 (Operator) Tri Ocean Mediterranean-15

Al Furat Petroleum Co., Syria

Himalaya Energy (Syria) B.V.-33.33 to 37.5, Shell-66.67 to 62.5 (Operator-Al Furat Petroleum Company)

16

Yemen

82

Medco-45, Kuwait Energy-25, IOC-15, OIL-15

17

UAE

Lower Zakum

ADNOC-60, Falcon Oil and Gas BV***-10, Inpex-10, CNPC-10, Total-5, ENI-5

18

Israel

Block 32

ONGC Videsh-25, BPRL-25, Oil India-25, IOCL-25

19

Oman

Mukhaizna

Occidental-45 (Operator), Indian Oil-17, Oman Oil Co-20, Liwa-15, Total-2, Partex-1

20

Brazil

Block BM-SEAL-4, Brazil

ONGC Videsh-25, Petrobras-75 (Operator)

BC-10, Brazil, Offshore

ONGC Videsh-27, Shell-50 (Operator) Qatar Petroleum International-23

BM-SEAL-11 (3 blocks), Sergipe Basin

Petrobras (Operator)-60, IBV 40

BM-C-30 (1 block), Campos Basin

Anadarko Petroleum (Operator)-30, British Petroleum-25, Maersk-20, IBV-25

BM-POT-16 (2 blocks), Potiguar Basin

Petrobras-30 (Operator), BP-30, GalpEnergia-20, IBV-20

Mansarovar Energy Colombia Limited (MECL), Colombia

ONGC Videsh–25–50, Sinopec-25–50, Ecopetrol-50 (Jointly Operated)

21

Colombia

(continued)

1.4 Energy Security—An Indian Perspective

23

Table 1.1 (continued) Sl. no.

22

23

Country

Venezuela

Vietnam

Name of the project

Participating companies and their shares (%)

Block RC-8, Colombia

ONGC Videsh-40 (Operator), Ecopetrol-40, Petrobras-20

Block RC-9, Colombia

ONGC Videsh-50, Ecopetrol-50 (Operator)

Block RC-10, Colombia

ONGC Videsh-50 (Operator), Ecopetrol-50

Block LLA-69, Colombia

ONGC Videsh-50, SIPC-50 (Jointly Operated)

Block GUA OFF 2

ONGC Videsh-100

CPO-5, Colombia

ONGC Videsh-70 (Operator), Petrodorado-30

SSJN7, Colombia

ONGC Videsh-50, Pacific Rubieales Energy (PRE)-50 (Operator)

San Cristobal Project

ONGC Videsh-40, PDVSA-60 (Jointly Operated)

Carabobo-1 Project, Venezuela

ONGC Videsh-11, IOC-3.5, OIL-3.5, Petronas-11, PDVSA-71 (Jointly Operated)

Block 06.1, Offshore

ONGC Videsh-45, TNK-35 (Operator), Petrovietnam-20

Block 128, Offshore

ONGC Videsh-100

24

Indonesia

Nunukan Block

BPRL-12.5; PT Pertamina Hulu Energy-35 (operator), PT Medico-40, Videocon Indonesia-12.5

25

Myanmar

Block A-1

ONGC Videsh-17, Daewoo-51 (Operator), KOGAS-8.5, GAIL-8.5, MOGE-15

Block A-3

ONGC Videsh-17, Daewoo-51 (Operator), KOGAS-8.5, GAIL-8.5, MOGE-15

Shwe Offshore Mid-Stream Project

ONGC Videsh-17, Daewoo-51 (Operator), KOGAS-8.5, GAIL-8.5, MOGE-15

Onshore Gas Transportation Pipeline

ONGC Videsh-8.347, CNPC-SEAP-50.9 (Operator), Daewoo-25.041, GAIL-4.1735, KOGAS-4.1735, MOGE-7.365

Block B-2

ONGC Videsh-97 (Operator), M&S-3 (continued)

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1 Conceptual Frameworks

Table 1.1 (continued) Sl. no.

26

27

28

Country

Bangladesh

Russia

USA

Name of the project

Participating companies and their shares (%)

Block EP-3

ONGC Videsh-97 (Operator), M&S-3

Block: M4

OIL-60, (Op) Oilmax-10, Mercator-25, Oil Star-5

Block:YEB

OIL:60, (Op) Oilmax-10, Mercator-25, Oil Star-5

Block SS4, Bangladesh

ONGC Videsh-45 (Operator), OIL-45; BAPEX-10

Block SS9, Bangladesh

ONGC Videsh-45 (Operator), OIL-45, BAPEX-10

Sakhalin-1, Offshore

ONGC Videsh-20, Exxon Mobil-30 (Operator), Sodeco-30, SMNG-11.5, RN Astra-8.5

Imperial Energy, Russia

ONGC Videsh-100

Vankorneft

ONGC Videsh-26, OIL, IOCL and BPRL-23.9

Taas-Yuryakh

OIL, IOCL, BPRL-29.9

Licence 61

OIL-50, Petroneft-50

Niobrara Shale Oil/Condensate JV asset

Carrizo (Niobrara) LLC-60; OIL-20, Indian Oil-10, Haimo Oil and Gas-10

Eagle Ford Shale acreage in Texas State

GAIL-20

Source Annual Report, 2018–2019, Ministry of Petroleum and Natural Gas, Government of India, 2019, pp. 78–81

policy approaches and diplomatic strategies in this regard include: first, the government of India is extensively engaging with the oil and natural gas-rich countries through institutional mechanisms like Joint Commissions, Hydrocarbon Conference, Joint Working Groups and Energy Dialogue for hydrocarbon value chain of the Indian companies. Second, encouraging Indian oil and natural gas companies to pursue the acquisition of hydrocarbon assets abroad and energy import, with the objective of increasing the oil and natural gas supply for the requirement of the nation. Third, the MPNG regularly represent India in the global energy dialogues and forums such as the International Energy Forum (IEF), International Energy Agency (IEA), and the Organisation of Petroleum Exporting Countries (OPEC). Fourth, in order to promote bilateral and multilateral engagements with other countries and international organizations on hydrocarbon resources including shale and gas hydrates, the MPNG has entered into a numerous collaborative arrangements, agreements, declarations and Memorandum of Understandings (MoUs). Fifth, India is seeking collaboration of the international organizations so as to avail and share technical assistance in Research

1.4 Energy Security—An Indian Perspective

25

and Development (R&D), data collection, statistical model building and energy forecasts. Sixth, the country has been arranging sector-specific high-level conferences, such as the India–Africa Hydrocarbons Conference, Petrotech, 5th IEF-IGU Ministerial Gas Forum (2016) and International Energy Forum-16 (IEF-16, 2018), to seek investments abroad and get engagement with the oil-rich countries and multinational companies. Seventh, to streamline the production of oil and natural gas abroad, the MPNG has been working in close coordination and cooperation with the InterMinisterial Energy Coordination committee (ECC), Ministry of Finance, National Security Advisor, Prime Minister of India, Ministry of External Affairs, Indian High Commissions or Embassies abroad, and such other senior officials, for addressing the precise issues faced by the Indian oil and natural gas companies.30 India in its quest for diversification is looking for all the potential energy markets in the world. In 2004–2005, the country imported oil from 25 different countries, including those from West Asia, Africa, South America and South East Asia.31 Further, in its consumption pattern, India is pursuing diversification of fuels so as to reduce its high dependence on oil. Since diversification has other advantages of being more efficient and less pollutant energy, the Indian government is all set to increase natural gas consumption dramatically in the years ahead. India has already been importing LNG through a long-term contract with Qatar and has made inroads to the Iranian, Oman and Russian gas. In addition to import of gas through the tankers and other means, India is also contemplating the import of gas through pipelines from gas-rich states or regions like Myanmar, Iran, Central Asia, Qatar and Russia. However, the pipelines have certain limitations like bureaucratic and political delays, geographical barriers, geopolitical constraints and security risks in the transit routes. Another option for energy trade is oil swaps. Russia wants to have oil swaps with China in the way that a part of its oil will reach to China and China will export the same volume of oil to India from its blocks in Myanmar. Through the Equity Investment, Indian oil and natural gas companies, both public and privately owned, have made significant investments in upstream, midstream and downstream sectors. However, there is no easy road ahead to diversify energy supply for India’s energy requirements, investment and import thereupon. India’s quest for more diversified system of imports is being impeded by transit problems emanating from strained or difficult relationship with the countries through which transit routes could possibly pass. In the context of TAPI, it is Afghanistan and Pakistan; for IPI, it is Pakistan and ongoing Iran—US imbroglio; for RCI, it is China; and for MBI, it is Bangladesh. Further, India and China have engaged in competition for leadership in Asia and the developing world; thus, energy security has now raised the possibility of further competition and confrontation. Indian Prime Minister Manmohan Singh had already warned in 2005 that “China is ahead of us in planning for its energy security— India can no longer be complacent” [47]. Manmohan Singh made it clear that India could not afford to be complacent in the face of China’s global campaign for secured energy supplies. Therefore, the way forward lays in cooperation. But China is fuelling Delhi’s “forward” Central Asian policy [48]. India, at this juncture, is also pursuing possible strategies to secure its global energy supply. In this period of faster economic growth, energy security has emerged as a critical component in redefining foreign

26

1 Conceptual Frameworks

policy priorities of India. The energy resources are high on India’s global agenda; the harnessing of such strategic resources depends on India’s geopolitical strategies [49]. Along with external strategies, India is pursuing various policies domestically to fulfil its global energy quest. With foreign investment drying up because of regulatory policy uncertainty, the MPNG, at the 21st World Petroleum Congress in Moscow, 2014, assured the international energy market to revamp its policies, which will be very predictable, transparent and simple for larger foreign investment. India’s proposed amendment on New Exploration Licensing Policy (NELP) for a uniform licensing policy to facilitate production of all forms of hydrocarbons—from oil to shale gas—under a single policy regime will definitely ensure time-bound delivery of government services under “Minimum Government and Maximum Governance” [50]. Apart from the strategic reserve storages facilities, the Approach Paper to the Ninth Five-Year Plan, 1997–2002, for example, recommended acquisition of acreage in other countries, and the Approach Paper to the Tenth Five-Year Plan, 2002–2007 advocated dismantling of the Administrative Price Mechanism (APM), restructuring of companies, and disinvestment and privatization of public sector undertakings, strategic storage of crude and petroleum products, enriching of oil supply basket and holding of oil and natural gas assets abroad. In short, the successive Five-Year Plans, three issues have been singled out here, which include securing of supplies, building up the stocks and seeking of the diversification of supplies and resources [51]. In the context of natural gas, the Indian government has made three significant price reforms. Firstly, in May 2010, it allowed the Administered Price Mechanism (APM) price to rise more than double, i.e. from $1.79 per million metric British Thermal Units (MMBTU) to $4.20 per MMBTU. Secondly, in December 2010, the government increased natural gas prices for “low priority” sectors, such as steel making and petrochemical sectors. Thirdly, minor reform in the “high priority” sector, such as fertilizer and power sectors, which account for nearly 73% of natural gas production, where the APM remained fixed [52]. In a future attempt, for increasing use of gas in the fertilizer and power sectors and to encourage mid-stream infrastructure, such as transportation LNG from terminals to the pipelines and city gas distribution, the government has halved the basic customs duty on LNG imports from 5 to 2.5% [41]. New Delhi is concerned about the uncertainty regarding the availability of oil, especially at the time of international crisis, and about the possibility of a sudden increase in oil price and its negative impact on the Indian economy. As a result, the Indian government has decided to establish “strategic petroleum reserves” (the Idea mooted by former Prime Minister of India, Shri Atal Bihari Vajpayee, in 1998) for 15 days of consumption in 2004. Significantly, to a step forward, the Expert Committee of the Planning Commission (NITI Aayog), in 2006 recommended that the government should build and maintain a strategic reserve for 90 days for strategiccum-buffer stock purposes and buying options for emergency supplies from large storages of the countries such as those available in Singapore. Likewise, the Indian government is also studying the possibility of a strategic reserve for natural gas. The government has already built three Strategic Petroleum Reserves at Visakhapatnam (Andhra Pradesh), Mangalore (Karnataka) and Padur (Kerala)—with a combined

1.4 Energy Security—An Indian Perspective

27

capacity of 5.33 MMT, which would be in addition to the existing storages of crude oil and petroleum products and would serve as a cushion during any exigencies. These three reserves have the individual capacity of approximately 1.33 MMT, 1.5 MMT and 2.5 MMT, respectively. The Visakhapatnam facility was commissioned in June 2015. In October 2016, the Mangalore Refinery and Petrochemicals Ltd. (MRPL) received the first parcel of crude oil for delivery into the Mangalore reserve, making it the second cavern after Visakhapatnam to be active [53]. At Padur reserve, there has been 99.20 cumulative physical progress, pre-commissioning checks are done, and facility is expected to be commissioned in first quarter of 2018–19.32 Significantly, in 2017, the Finance Minister Arun Jaitley announced that the government will build two more strategic oil reserves with a combined capacity of 10 million metric tonnes (MMT) at Chandikhole (Odisha) and Bikaner (Rajasthan), and with the inclusion of these two oil reserves the total capacity of storage will increase to 15.33 MMT, which can reserve the oil up to 22 days to meet any emergency situation [53]. An Assessment The energy perspective in international relations has passed through different theoretical and conceptual orientations through the different periods of history and the writings of the scholars. In the final analysis, it is liberalism and neoliberal perspective has taken the lead in the analysis of geopolitics of energy and energy security. To ensure energy security, the major oil importing and powerful countries have resorted to various tactics, including involvement and interference in the domestic politics of oil-rich countries, war and civil war. The developing countries, like India, however, averted to realist or neo realist approaches in its geopolitics to ensure energy security. Its foreign policy approaches largely follow liberalism and neoliberal institutionalism in its international quest for energy security. The concept energy security is inextricably woven with energy trade and investment, foreign policy and geopolitics. Energy security is comprehensive in its meaning and has various dimensions for both the oil-importing and oil-exporting countries, apart from having some common characteristics. For the oil-importing countries reliability, affordability, accessibility and uninterrupted supply; for the oil-xporting countries, demand for supply and profitable crude price; and the common characteristics between the two categories include reliability and uninterrupted supply of energy. In addition to the four common characteristics of energy security of all oil importing countries, in the Indian context, energy security includes self-sufficiency of energy for economic growth requirement, meeting the expectations of the citizens, and welfare of the common people in the country. In its quest for energy security, India has diversified its supply basket and invested in different parts of the world at the upstream, midstream and downstream sectors of oil and natural gas. The Arctic energy has posed as a newest destination for the Indian investors to explore, and the Shale energy has turned as the latest inclusion to India’s non-conventional energy resources and global energy market. Moreover, while going abroad, India has simultaneously conducted extensive research and investment in the hydrocarbon resources within the country for a comprehensive security arrangement.

28

1 Conceptual Frameworks

End Notes 1.

2.

3. 4. 5.

6. 7. 8. 9. 10.

11. 12.

13.

14.

This was reiterated by the Minister of Petroleum and Natural Gas of India, Dharmendra Pradhan, in his meeting with the Ambassadors of OPEC countries in New Delhi, on 14 June 2018, in, ‘Dharmendra Pradhan asks OPEC to price oil responsibly’, The Economic Times, 15 June 2018, https://economictimes. indiatimes.com/industry/energy/oil-gas/dharmendra-pradhan-asks-opec-toprice-oil-responsibly/articleshow/64596866.cms. ‘Dharmendra Pradhan asks OPEC to price oil responsibly’, The Economic Times, 15 June 2018, https://economictimes.indiatimes.com/industry/energy/ oil-gas/dharmendra-pradhan-asks-opec-to-price-oil-responsibly/articleshow/ 64596866.cms. ‘Dr. Mohammad Mossadegh Biography, Prime Minister of Iran, 1951–1953’, http://www.mohammadmossadegh.com/biography/. ‘What is energy security?’, International Energy Agency, https://www.iea.org/ topics/energysecurity/whatisenergysecurity/. ‘Energy Security is National Security, Remarks of Senator Barack Obama’, Governor’s Ethanol Coalition. Washington, DC, February 28, 2006, http://oba maspeeches.com/054-Energy-Security-is-National-Security-Governors-Eth anol-Coalition-Obama-Speech.htm. ‘What is energy security?’, International Energy Agency, https://www.iea.org/ topics/energysecurity/whatisenergysecurity/. ‘What is energy security?’, International Energy Agency, https://www.iea.org/ topics/energysecurity/whatisenergysecurity/. Twelfth Five Year Plan (2012–2017), Planning Commission of India, Government of Volume II, p. 134. Integrated Energy Policy, Report of the Expert Committee, Planning Commission, Government of India, August 2006, pp. 54–55. ‘India’s Energy Future has Four Pillars, Energy Access, Energy Efficiency, Energy Sustainability and Energy Security: PM’, Narendra Modi revealed this at IEF-16, https://www.narendramodi.in/pm-modi-inaugurates-the-16th-intern ational-energy-forum-in-new-delhi-539611. President of India, Dr. A. P. J. Abdul Kalam, speech on 59th Independence Day anniversary, available at http://www.presidentofindia.nic.in. This was spelt out by Dinesh Kumar Sarraf, the Chairman of the Petroleum and Natural Gas Regulatory Board (PNGRB) of the Ministry of Petroleum and Natural Gas, Government of India; quoted in [40], and Chapter IV, ‘Energy Security’, Report of the Expert Committee (REC), Planning Commission of India, 2006, p. 55. Executive Summary on Power Sector, October 2019, Central Electricity Authority, Ministry of Power, Government of India, http://cea.nic.in/reports/ monthly/executivesummary/2019/exe_summary-10.pdf. We Care for the Planet: A Pathbreaking Journey in Renewable Energy through Last Four Year, Ministry of New and Renewable Energy, Government of India, https://mnre.gov.in/sites/default/files/uploads/MNRE-4-Year-Achiev ement-Booklet.pdf.

1.4 Energy Security—An Indian Perspective

29

15. Ministry of New and Renewable Energy, Government of India, https://mnre. gov.in/. 16. Chapter IV, ‘Energy Security’, Report of the Expert Committee (REC), Planning Commission of India, 2006, p. 55. 17. Annual Report, 2016–2017, Ministry of Petroleum and Natural Gas, Government of India, p. 70. 18. Quoted in [39]. 19. Chapter IV, ‘Energy Security’, Report of the Expert Committee (REC), Planning Commission of India, 2006, p. 55. 20. ‘India needs to trim its overdependence on OPEC crude oil’, DNA, https:// www.dnaindia.com/analysis/column-india-needs-to-trim-its-overdependenceon-opec-crude-oil-2566587. 21. Chapter IV, ‘Energy Security’, Report of the Expert Committee (REC), Planning Commission of India, 2006, p. 55. 22. ‘India’s Energy Future has Four Pillars, Energy Access, Energy Efficiency, Energy Sustainability and Energy Security: PM’, Narendra Modi revealed this at IEF-16 https://www.narendramodi.in/pm-modi-inaugurates-the-16th-intern ational-energy-forum-in-new-delhi-539611. 23. Chapter IV, ‘Energy Security’, Report of the Expert Committee (REC), Planning Commission of India, 2006, p. 55. 24. India: Hydrocarbon Vision 2025, Ministry of Petroleum and Natural Gas, Government of India, http://petroleum.nic.in/vision.doc. 25. Medium-Term Market Report 2016, Energy Information Administration, p. 11. 26. Mike [54]. BP Statistical Review of World Energy, June 2016, pp. 23, 33. Grigas [44]. BP Statistical Review of World Energy, June 2016, pp. 23, 33 27. Country Insights: India, 2016. BP, http://www.bp.com/en/global/corporate/ene rgy-economics/energy-outlook-2035/country-and-regional-insights/2015/04/ NG-96.pdf. 28. Manmohan Singh told this to the Financial Times newspaper (UK) and this is quoted in [45]. 29. India Hydrocarbon Vision 2025, Ministry of Petroleum and Natural Gas, Government of India. Integrated Energy Policy: Report of the Expert Committee, Planning Commission of India, Government of India, August 2006. 30. Annual Report, 2016–17, Ministry of Petroleum and Natural Gas, Government of India, 2017, pp. 70–71. 31. Chapter I, ‘The Challenges’, Integrated Energy Policy, Report of the Expert Committee (REC), Planning Commission, Government of India, August 2006, p. 10. 32. Indian Strategic Petroleum Reserves Limited, http://www.isprlindia.com/abo utus-2.asp.

30

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References 1. Klare, Michael T. 2002. Resource Wars: The New Landscape of Global Conflict. New York: Henry Holt and Company. 2. Waltz, Kenneth N. 1979. Theory of International Politics. Long Grove: Waveland Press. 3. Mearsheimer, J.J. 2001. The Tragedy of Great Power Politics. New York: Norton. 4. Collins, Alan (ed.). 2016. Contemporary Security Studies, 4th ed. Oxford: Oxford University Press. 5. Buzan, B., O.J. Waever, and De Wilde. 1998. Security: A New Framework for Analysis, 7. London: Lynne Rienner Publishers. 6. Buzan, B. 2007. People, States and Fear: An Agenda for International Security Studies in the Post-Cold War Era, 2nd ed. Colchester: ECPR Press. 7. Burchill, Scott. 2005. Liberalism. In Theories of International Relations, ed. Scott Burchill, Andrew Linklater, et al., 55–83. New York: Palgrave Macmillan. 8. Howard, M. 1978. War and the Liberal Conscience, 29, 37. London: Oxford Press. 9. Krasner, Stephen. 2009. In Fifty Key Thinkers in International Relations, ed. Martin Griffiths, Steven C. Roach, and M.Scott Soloman, 42–50. London: Routledge. 10. Jackson, Robert, and George Sorensen. 2010. Introduction to International Relations: Theories and Approaches. New York: Oxford. 11. Keohane, R.O. 1989. International Institutions and State Power: Essays in International Relations Theory. Boulder: Westview Press. 12. Keohane, Robert O. 2009. In Fifty Key Thinkers in International Relations, ed. M. Griffiths, S.C. Roach, and M.Scott Soloman, 109. London: Routledge. 13. Keohane, Robert O. 1984. After Hegemony: Cooperation and Discord in the World Political Economy. Princeton: Princeton University Press. 14. Keohane, Robert. 1988. International Institutions: Two Approaches. International Studies Quarterly 32: 383. 15. Rosecrance, Richard. 1986. The Rise of the Trading State: Commerce and Conquest in the Modern World. New York: Basic Books. 16. Sutch, Peter, and Juanita Elias. 2007. The Basics: International Relations, 64–81. Abingdon: Routledge. 17. Rosecrance, Richard. 2009. In Fifty Key Thinkers in International Relations, ed. Martin Griffiths, Steven C. Roach, and M.Scott Soloman. London: Routledge. 18. Sterling-Folker, Jennifer. 2007. Liberalism. In Making Sense of International Relations Theory, ed. Jennifer Sterling-Folker, 55–61. New Delhi: Viva Books. 19. Sterling-Folker, Jennifer. 2007. Game Theory. In Making Sense of International Relations Theory, ed. Jennifer Sterling-Folker, 93–97. New Delhi: Viva Books. 20. Dougherty, J.E., and R.L. Pfaltzgraff Jr. 1997. Contending Theories of International Relations: A Comprehensive Survey, 4th ed, 403. New York: Addison-Wesley Longman. 21. Andrew-Speed, P. 2006. The Energy Charter Treaty and International Petroleum Politics. http:// www.dundee.ac.uk/cepmlp/journal/html/article3-6.htm. 22. Strange, S. 1988. States and Markets, 27–29. London: Pinter Publishers. 23. Buchan, D. 2002. The Threat Within: Deregulation and Energy Security. Survival 44 (3): 109. 24. Dietl, Gulshan. 2004. New Threats to Oil and Gas in West Asia: Issues in India’s Energy Security. Strategic Analysis 28 (3). 25. Yergin, Daniel, and Thane Gustafson. 1995. Russia 2010 and What it Means for the World, 295–302. New York: Vintage. 317–322. 26. International Energy Security. 2015. Energy Charter Secretariat, 2015. 27. Luft, G., A. Korin, and E. Gupta. 2011. Energy Security and Climate Change: A Tenuous Link. In The Routledge Handbook of Energy Security, ed. B.K. Sovacool, 43–55. Oxon: Routledge. 28. Cherp, Aleh, and Jewell, Jessica. The Concept of Energy Security: Beyond the Four As. Energy Policy 75 (3): 415–421. IDEAS. https://ideas.repec.org/a/eee/enepol/v75y2014icp415421.html.

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29. Jewel, Jessica. 2011. The IEA Model of Short-term Energy Security (MOSES) Primary Energy Sources and Secondary Fuels. Working Paper, International Energy Agency. https://www.res earchgate.net/publication/254439192_The_IEA_Model_of_Short-Term_Energy_Security_ MOSES_Primary_Energy_Sources_and_Secondary_Fuels. 30. International Energy Charter. 2015. Energy Charter Secretariat, May 2015. 31. Bazilian, M., B. Sovacool, and M. Miller. 2013. Linking Energy Independence to Energy Security. International Association for Energy Economics, 17–21. https://www.itu.int/en/ITUT/climatechange/resources/…/Bazilian_Security_IAEE.pdf. 32. Winzer, Christian. 2011. Conceptualizing Energy Security. Cambridge Working Paper in Economics, 1–36. 33. Yergin, Daniel. 2012. The Quest: Energy, Security, and the Remaking of the Modern World, 268–269. New York: Penguin. 34. Sahay, Shashi, and Vipra Swami Arya. 2016. India’s Quest for Energy Security and Its West Asia Policy. http://digitalrepository.unm.edu/hprc/2016/papers/12/. 35. Energy Security Outlook. 2015. Defining a Secure and Sustainable Energy Future for India, 3. New Delhi: TERI Press. 36. Dasgupta, B. 1971. The Oil Industry in India. London: Frank Cass. 37. Mistry, Dinshaw. 2010. Domestic and International Influences on India’s Energy Policy, 1947– 2008. In India’s Foreign Policy: Retrospect and Prospect, ed. Sumit Ganguly. New Delhi: Oxford University Press. 38. Mehrotra, Santosh. 1990. India and the Soviet Union: Trade and Technology Transfer, 116–117. Cambridge: Cambridge University Press. 39. Petleva, Vitaly, and Toporkov. 2019. Interview of M/o Petroleum and Natural Gas to Vedomosti, Embassy of India. Moscow, Russia, September 4. https://indianembassy-moscow.gov.in/pressreleases-04-09-19.php. 40. Mahajan, Anilesh S. 2018. India’s Energy Push. Business Today, May 6. https://www.busine sstoday.in/magazine/cover-story/indias-energy-push-rising-oil-prices-opec-saudi-gas-transp ortation/story/275020.html. 41. Budget. 2017. Arun Jaitley halves import duty on LNG to 2.5 per cent. The Economic Times, February 1. https://economictimes.indiatimes.com/industry/energy/oil-gas/budget-2017-arunjaitley-halves-import-duty-on-lng-to-2-5-per-cent/articleshow/56923207.cms. 42. Sikri, Rajiv. 2009. Challenge and Strategy: Rethinking India’s Foreign Policy, 205–206. New Delhi: Sage. 43. Sen, Anupama. 2015. Gas Pricing Reform in India: Implications for the Indian Gas Landscape. OIES Paper. Oxford Institute for Energy Studies. http://www.oxfordenergy.org/wpcms/wp-con tent/uploads/2015/04/NG-96.pdf. 44. Grigas, Agnia. 2017. The New Geopolitics of Natural Gas, 253. Cambridge: Harvard University Press. 45. Blank, Stephen. 2005. India’s Energy Offensive in Central Asia. Central Asia-Caucasus Analyst, Central Asia-Caucasus Institute 6 (5): 1–25. www.cacianalyst.org/resources/pdf/iss ues/20050309Analyst.pdf. 46. Mistry, Dinshaw. 2013. Domestic and International Influences on India’s Energy Policy, 1947– 2008. In India’s Foreign Policy: Retrospect and Prospect, ed. Sumit Ganguly, 325–326. New Delhi: Oxford University Press. 47. Aiyar, Mani Shankar. 2006. Asia’s Quest for Energy Security. Frontline 23 (3): 11–24. 48. Bedi, Rahul. 2002. India and Central Asia. Frontline 19 (19): 38–41. 49. Laxmi, Vijay. 2007. India-Central Asia Relations: Quest for Energy Security. Dialogue 8(4). http://www.asthabharati.org/Dia_Apr07/laxm.htm. 50. Pradhan, S.K. 2015. Shale Gas in Indo-US Cooperation. Geopolitics V (IX): 62–65. 51. Dietl, Gulshan. 2004. New Threats to Oil and Gas in West Asia: Issues in India’s Energy Security. Strategic Analysis 28 (3): 383. 52. Ebinger, Charles K. 2013. Energy and Security in South Asia: Cooperation or Conflict, 132. Delhi: Foundation.

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53. Patel, Deepak. 2017. Two More Strategic Oil Reserves to be Built. The Indian Express, February 2. http://indianexpress.com/article/business/budget/two-more-strategic-oil-reservesto-be-built-odisha-bikaner-4503370/. 54. Mellish, Mike. 2015. China and India Drive recent Changes in World Coal Trade. EIA, November 20. http://www.eia.gov/todayinenergy/detail.cfm?id=23852&src=email.

Chapter 2

Africa: Existing Potentials with a Promising Future

The chapter attempts to analyse Africa’s oil and natural gas potentials, nature and extent of Indian trade and investment, resource diplomacy, Chinese competitions and Internal Security issues. Simultaneously merging issues have cropped up: Can energy deficit in the African region contribute for India’s energy quest? Is there a new scramble for African resources? How far oil curse is applicable in the African context? And, is India in a better footprint for the African energy resources? This chapter begins with the analysis of existing oil and natural gas potentials in Africa and looks into both traditional North African and emerging sub-Saharan African countries. Also, interpretation is done on undiscovered and new discoveries in the regions. Further, India’s economic growth and domestic requirements definitely prompt India for its larger presence in the African resource market than the existing trade and investment potentials. India’s resource diplomacy has included India’s sectoral and regional approach so as to overcome the existing challenges and better access in the African energy market. The chapter finally ends with the analysis of what future lies in India–Africa energy cooperation in the oil and natural gas sector.

2.1 Trade and Investment Potentials With its rich reserves and new finds, Africa is fast emerging as a hot spot in the world energy map. It is well endowed with hydrocarbons, with proven oil reserves of 125.3 tmb (7.2%) and 14.4 tcm (7.3) of natural gas. The production of hydrocarbon sector of Africa contains 8193 tbd (8.6%) of oil and 236.6 bcm (6.1%) of the world’s total natural gas explorations (Tables 2.1 and 2.2). Apart from major energy hubs of Libya, Nigeria, Angola and Algeria, a country with new potential in Africa is Cameroon. The country Egypt in North Africa and Arab world is an important player in the oil market of Africa; Mauritania in West Africa, although relatively small producer, has large unexplored offshore oil reserves which is estimated to be about 600 million barrels. Uganda is another new oil producer with the potential for © Springer Nature Singapore Pte Ltd. 2020 S. K. Pradhan, India’s Quest for Energy Through Oil and Natural Gas, https://doi.org/10.1007/978-981-15-5220-5_2

33

34

2 Africa: Existing Potentials with a Promising Future

Table 2.1 Africa’s oil reserves and production by the end of 2018 Country

Reserve in thousand million barrels/thousand million tonnes

Share at global level (%)

Production in thousands barrels per daily/million tonnes

Share at global level (%)

Algeria

12.2 (1.5)

0.7

1510 (65.3)

1.6

Angola

8.4 (1.1)

0.5

1534 (74.6)

1.6

Chad

1.5 (0.2)

0.1

101 (5.3)

0.1

Republic of Congo (Brazzaville)

1.6 (0.2)

0.1

333 (17.0)

0.4

Egypt

3.3 (0.4)

0.2

670 (32.7)

0.7

Equatorial Guinea

1.1 (0.1)

0.1

190 (8.7)

0.2

Gabon

2.0 (0.3)

0.1

194 (9.7)

0.2

Libya

48.4 (6.3)

2.8

1010 (47.5)

1.1

Nigeria

37.5 (5.1)

2.2

2051 (98.4)

2.2

South Sudan

3.5 (0.5)

0.2

131 (6.4)

0.1

Sudan

1.5 (0.2)

0.1

100 (4.9)

0.1

Tunisia

0.4 (0.1)

*

50 (2.3)

0.1

Other Africa

3.9 (0.5)

0.2

320 (15.7)

0.4

Total

125.3 (16.6)

7.2

8193 (388.7)

8.6%

*Indicates less than 0.05% Source BP Statistical Review of World Energy, June 2019, pp. 14, 16

Table 2.2 Africa’s proved natural gas reserves and production by the end of 2018 Country

Reserve in trillion cubic metres/trillion cubic feet

Share at global level (%)

Production in billion cubic metres

Share at global level (%)

Algeria

4.3 (153.1)

2.2

92.3

2.4

Egypt

2.1 (75.5)

1.1

58.6

1.5

Libya

1.4 (50.5)

0.7

9.8

0.3

Nigeria

5.3 (188.8)

2.7

49.2

1.3

Other Africa

1.2 (41.7)

0.6

26.7

0.7

Total

14.4 (509.6)

7.3

236.6

6.1

Source BP Statistical Review of World Energy, June 2019, pp. 30, 32

300 million barrels. Other producers include the Republic of Congo and Tunisia. The tiny island country of Sao Tomé and Principe is readying itself for an oil boom, and it has already signed agreements with different countries to explore the maritime

2.1 Trade and Investment Potentials

35

area and jointly owns reserves with Nigeria in the Gulf of Guinea, believed to hold up to 14 billion barrels of oil reserves [1]. North Africa is an established and potential supplier of energy. However, the subSaharan region has emerged as the new potential energy market in Africa. This region in 2009 and 2014 constituted 30% of global oil and gas discoveries made, and most of the discoveries were found in “continental margin basins” along the coastline. Significantly, the year 2012 witnessed 14 billion barrels of oil equivalent (boe) discovered which counted 60% of the world’s total. While the large gas discoveries in Mozambique (mainly offshore Rovuma Basin) and Tanzania dominated the overall scenario, yet these were complemented by pre-salt oil and gas discoveries in Angola (largely Kwanza Basin). The natural gas production in sub-Saharan region has increased from 7 bcm in 1990 to 58 bcm in 2012, making it a small but fast-growing contributor to global gas supply. While the large-scale natural gas discoveries are found in Mozambique (mainly the offshore Rovuma Basin) and Tanzania, these are complemented by pre-salt oil and gas discoveries in the Kwanza Basin in Angola, with oil finds in the Keta-Togo-Benin Basin in Nigeria. Chad, Ghana and Equatorial Guinea have already begun exploration, while discoveries in Kenya and Uganda offer the potentials to open up production in the East African Rift Basin by the end of 2020 [2]. There are important geological regions in sub-Saharan Africa which have huge potentials of energy, and productions have started. First, the Niger Delta Basin—a long-standing source of oil and gas production in Africa, the majority of the basin lies in Nigerian waters. The Eastern edge of the Niger Delta extends into Cameroon and Equatorial Guinea (Rio Del Rey Basin). The US Geological Survey (USGS) ranks the Niger Delta as the 12th richest basin in undiscovered petroleum resources in the world, with 30 billion barrels of undiscovered oil resources and 60 billion barrels of recoverable oil resources. Second—the East African Rift—it extends to Uganda, Kenya and their neighbouring countries like Democratic Republic of Congo, Rwanda, Burundi, Tanzania and Ethiopia. The intense drilling is seen in Uganda, with the Kingfisher discovery in 2007 and others in the vicinity amounting to 1.7 billion barrels of recoverable oil. In Kenya, exploration has so far discovered 600 million barrels of recoverable resources, specifically in the Lokichar Basin. Further, Ethiopia holds further promises in the Ogaden Basin. Third—the East African Coastal—about 5 tcm of gas resources have been discovered in the East African coastal waters off Mozambique and Tanzania, predominantly in the Rovuma and Tanzanian coastal basins. Moreover, the USGS estimates that there are 41 billion barrels of oil and 13 tcm of gas to be found in the four geologic provinces off the East coast of Africa, including Madagascar and Seychelles. Fourth—the West African Transform Margin—the discovery of the Jubilee field in Ghana in 2007 has led the expectations for more to come in this relatively underexplored basin stretching from Mauritania to the Niger Delta. Significantly, the area under licence for this region has been doubled, with technical discoveries being made in Liberia, Sierra Leone and Côte d’Ivoire, although further appraisal is required to ascertain their commercial viability. Fifth— West Coast Pre-Salt—Diaman discoveries in Gabon, Marine XII block in Congo and Lontra and Mavinga in Angola have witnessed discoveries below the salt layers,

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proving that such pre-salt systems exist in West Africa. The volumes discovered so far have been modest and mainly natural gas, but there is the hope for larger discoveries and particular focus is on Angola’s Kwanza and Benguela Basins. Perspective pre-salt discoveries are also being explored in Cameroon, Equatorial Guinea and Namibia [2]. With a population smaller than Asia, Africa’s per capita hydrocarbon resource at present is significantly higher to some of the developing countries in the world, putting it in a unique position to export oil and gas to fast-emerging economies such as India. There are some specific reasons which promise for wider scope of oil and gas imports from Africa and investment in the continent. First, Africa’s estimated oil reserves are small compared with those in the Gulf, but the quality of its crude found in the Gulf of Guinea is light, sweet, viscous and low in sulphur contents, therefore, makes it an attractive option along with easier and cheaper refining process than Middle Eastern oil. Second, 65% of India’s oil requirements are met by the Gulf, a region of perennial turmoil. Third, the Strait of Hormuz an important channel for the global oil and natural gas supplies and Strait of Hormuz through which a two-thirds of oil and half of India’s LNG imports passes [3] are under the intense impact of geopolitical rivalry and conflicts, which causes the fear of sea lane security and uncertainty of energy supply. Fourth, most of the African reserves and wells are located offshore, which means decreased transport costs and reduced risk of political violence. Fifth, existing sea lanes which connects Africa to India can be used for quick, cheap and secured supply of energy. Although there is some concerns of piracy in the region, yet the oil supply routes in the Indian Ocean are highly guarded, and there is no need for building expensive pipelines or supplying of oil through the hostile countries and difficult terrains. This high sea and direct passage turn Africa into a more attractive destination for the Indian oil and natural gas companies. Sixth, the fiscal regimes and taxation of oil exploration and processing in Africa are comparably low specifically, Equatorial Guinea and Gabon, and Africa is a better option if compared to explorations in the North Sea and the Gulf of Mexico. Seventh, worried about its excessive dependence on the West Asia, India has been scouting for oil outside this region. Looking into all these perspectives, Africa’s explored and untapped energy potentials are of major attraction for Indian investments there and this is in consonance to what Indian leaders and think tanks project Africa as the “new destination” and “pivotal” to India’s energy security. Highlighting the IndiaAfrica Summit meeting in 2015, Prime Minister of India Narendra Modi aptly said, “African energy helps run the engine of the Indian economy, continent’ s resources are powering our industries, and the nation hopes for a sizeable share of Africa’s vast natural resources” [4, 5]. India has resorted to different approaches and strategies to harness African oil and gas resources, yet, there is not any easy ride over the energy resources in Africa. It is noteworthy to mention that Africa today meets 16.7% (787,700 barrels per day (bpd)) [6] of India’s oil needs and 7.5% of its natural gas imports (4877 tbd).1 India has been importing oil largely from eight African countries with different quantities. Nigeria has been the leading oil supplier to India, accounting for 11% of its oil imports from Africa,2 followed by Angola, Egypt, Equatorial Guinea, Libya, Sudan,3

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Cameroon and Congo. Besides oil, India is also engaged in importing natural gas mainly from Nigeria, Equatorial Guinea and Egypt. While the crude oil accounts for two-thirds of India’s total imports from the African continents, refined petroleum products account for a third of India’s exports to Africa [7]. Significant to mention, in 2015, India ranked as the sixth largest exporter of refined petroleum products in the world with $30 billion in sales (5% of the global total), and Africa today is the second-largest market and destination for Indian petroleum products. Moreover, many African countries are interested in increasing their own refining capabilities, and the Indian FDI in this sector is expected to rise [8]. Not only FDI in refining sector, Africa is hopeful that FDI by Indian petroleum companies will lead to technology transfer to the African energy firms, which in turn will contribute for petroleum exploration, production and refining [9]. India, which was traditionally relied on West Asian countries for heavy and sour oil supplies, the recent establishment of Indian Oil Corporation’s (IOC) 3,00,000 bbl/day Paradip refinery plant in the Eastern coast of Odisha state is expected to refine the sweet and lighter crude from West Africa. In the opinion of Narendra Taneja, the chief executive of the World Oil and Gas Assembly and an energy expert associated with the international oil and gas newspaper “Upstream”, “Today’s growth story is India and in 15–20 years, the growth story will be Africa, and India wants to be in Africa as a strong partner”. India had largely invested in seven [10] African countries in the form of assets and project assignments. Namibia is the latest country in addition to investments. Indian investments are basically of three types—stand-alone, jointly operated and operator. By the end of September 2015, the OVL had invested around $8 billion in Africa and set to double its investments to $16 billion over the next three years, with prior focus on oil and natural gas exploration in Algeria, Angola and Equatorial Guinea [11]. In 2015, Nigeria superseded Saudi Arabia as India’s largest supplier of crude oil [9], and in past, in a major breakthrough in 2005, Mittal Steel and Oil and Natural Gas Corporation (ONGC) announced an investment of $6 billion to establish a refinery, power plant and railway lines in Nigeria through a joint venture company, ONGCMittal Energy Ltd (OMEL). Under the mega deal between ONGC and the Nigerian government, OMEL will create the infrastructure, while Nigeria would give its oil blocks to them [12]. This joint venture and infrastructural approach of OMEL is wholly in keeping with the modus operandi of cash-rich Chinese companies. Apart from this, Essar, an Indian private company, has procured exploration and production blocks in Madagascar and Nigeria. The ONGC has pumped $2 billion into eight countries in Africa, including Sudan, Libya, Egypt and Nigeria for research and exploration of oil and gas. The consortium of Indian Oil Corporation (IOC), India’s biggest state-run refinery and Oil India Ltd. (OIL) have invested $125 million in Libya, Nigeria and Gabon. The Gas Authority India Limited (GAIL) has entered into a joint venture with Egyptian National Gas Company (NATGAS) with a 15% equity for gas distribution project in Egypt [13] and has signed up for pipeline and city gas projects in Libya. GAIL has made an investment of $22 million in Egypt, the largest so far made by GAIL in any overseas market. While IOC has offered to invest in a gas-based petrochemicals plant and set up LNG facility, private companies like Reliance and Essar have sought official support of the Mozambique government to

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bid there. In addition to GAIL and IOC, the Gujarat State Petroleum Corporation (GSPC) along with other Indian companies has taken lead in Egypt [14]. The OVL, which is present in two blocks in Sudan, is on its way of joining two more blocks in the country and completed the project of 741 km pipeline, cost of $200 million, that linked Port Sudan on the Red Sea with Sudan’s capital Khartoum [15]. The OVL also wants to buy a 30% stake from Petronas of Malaysia in the massive Block 8 in the Blue Nile Basin. GAIL has already announced for looking a stake in a LNG plant in Nigeria and has been interested in setting up a gas-based petrochemical plant in this country. In March 2006, India signed a MoU with Mauritius for exploration of hydrocarbon deposits off the island nation’s coast. The MoU, in the opinion of Indian government, with Mauritius provides both depth and spread to the oil-energy security scenario for the country.4 In South Africa, from the Indian side, negotiation is going on for setting up of LPG logistics in South Africa, helping the Petroleum Oil and Gas Corporation of South Africa (PetroSA) for utilization of Coal-to-Liquid (CTL) technology of India, working for bilateral cooperation in setting up of CNG network in South Africa and facilitating training facilities to South African personnel in the hydrocarbon sector.5 Apart from major investments, India is also looking at new destinations such as Cote de Ivore, Ghana, Ethiopia, Madagascar and Malawi. In Cote de Ivore, OVL plans to invest offshore drilling; GAIL developing CNG facilities in Ghana has offered an area of cooperation in which Engineers India Limited (EIL) could assist in engineering and technical consultancy services in the country; in Ethiopia, OVL has worked out plan to set up a refinery in the highly unexplored oil sector and offered assistance in developing a pipeline network along with building infrastructure for transportation of LNG in smaller quantities to the places which are not connected by the pipeline. In 2014, India and Mozambique signed the agreement for the development latter’s natural gas sector, which will benefit Indian companies that have jointly planned to invest $12 billion to develop offshore gas fields [16]. The Essar has procured exploration and production blocks in Madagascar and Nigeria [17], and the Reliance company has set its footprints in Sudan [9, pp. 88–95]. What is more, the Equatorial Guinea is going to offer stakes in its oil blocks to India, and the EIL has been working as a consultant for SONATRACH, the Algerian national oil company, for the last 25 years [9]. In a more specific manner, as discussed earlier, India’s major investment in Africa could be seen in seven countries such as Sudan, South Sudan, Mozambique, Libya, Nigeria, Gabon and Namibia, with their various extents of investment (Table 2.3).

2.2 Foreign Policy Pursuits and Resource Diplomacy By engaging African countries more closely, India expects to reach out to the African countries bilaterally and multilaterally in a more focused manner and expanded its presence across the hydrocarbon value chain in Africa. Seen as an initiative to shift overdependence from the Organization of Petroleum Exporting Countries (OPEC) to other sources of energy, to cope with the alarming rise in crude oil prices and to

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Table 2.3 India’s investment in oil and natural gas sectors in Africa by the end 2018 Sl. No.

Country

Name of the project

Participating companies and their shares (%)

1

Sudan

GNPOC, Block 1, 2 and 4, Sudan

ONGC Videsh—25, CNPC—40, Petronas—30, Sudapet—5 (Jointly Operated)

Khartoum-Port Sudan Pipeline (741 km), Sudan

ONGC Videsh-90 (Operator), OIL-10

GNPOC, Block 1, 2 and 4, South Sudan

ONGC Videsh—25, CNPC—40, Petronas—30, Nilepet—5 (Jointly Operated)

SPOC/Block 5A, South Sudan

ONGC Videsh—24.125, Petronas—67.875, Nilepet—8 (Jointly Operated)

2

South Sudan

3

Mozambique

Rovuma Area-1

ONGC Videsh—16, Anadarko—26.5 (Operator), OIL—4; ENH—15, Mitsui—20, BPRL—10, PTTEP—8.5

4

Libya

Block 43

ONGC Videsh—100

Area 95–96

Sonatrach—50, Indian Oil—25, OIL—25

OPL—205

Summit Oil—30

OML—142

Suntera Nigeria 205 Ltd—70, Suntera—50, Indian Oil—25

5

Nigeria

6

Gabon

Shakthi

Old PSC: OIL—45, Indian Oil—45, Marvis Pte Ltd—10, New PSC: OIL—50, Indian Oil—50

7

Namibia

PEL 0037

Tullow Namibia—35 (Operator), Pancontinental Namibia–30, OVL—30, Paragon Oil and Gas—5

PEL 30

Eco Oil and Gas Namibia—32.5 (Operator), Azimuth Namibia Ltd—32.5, ONGC Videsh—15, Tullow Namibia—10, National Petroleum Corp of Namibia (Pty) Ltd—10

Source Annual Report, 2018–2019, Ministry of Petroleum and Natural Gas, Government of India, 2019, pp. 78–81

withstand the OPEC policy dictates, India conducts its India–Africa Hydrocarbon Conference regularly in every second year. This is the first sector-specific conclave of India to engage the continent, which is an indication for building of partnerships with Africa on Chinese lines. At the Fourth India–Africa Hydrocarbons Conference in New Delhi in January 2016, Dharmendra Pradhan, the Minister of Petroleum and Natural Gas, Government of India, clearly declared for India’s further import of oil

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and natural gas from Africa [9, pp. 88–95],6 and the broad outcome of all these conferences include five main areas of cooperation between India and the African nations: first, buying more crude from Africa; second, investing more on the upstream sectors on a bilateral basis; third, exploring opportunities to secure more LNG; fourth, making available India’s skills for the Africans; and fifth, talent and technology in a more cost-effective manner for the benefits of African nations and community development in such countries. India has signalled that it is interested not just in buying of Africa’s oil resources but participating in all the phases of hydrocarbon sector— Research & Development (R&D), exploration, distribution, refining, storage and transportation.7 The conclave has been conceptualized with the objective to foster bilateral trade relations in the hydrocarbon sector, understand policy and regulatory mechanisms and opportunities for investment in different streams and phases of hydrocarbon energy. By engaging African countries more closely, India expects to reach out to the identified countries in a more focused manner and expand its presence across the hydrocarbon value chain in Africa. Likewise, since 70% of Africa’s oil production is concentrated in West Africa’s Gulf of Guinea (often described as the Persian Gulf of Africa), India has pledged for $500 million (Rs. 1968 crore) concessional lines of credit (LOC) to eight West African countries—Burkina Faso, Chad, Equatorial Guinea, Ghana, Guinea-Bissau, Ivory Coast, Mali and Senegal— with whom it has formed the techno-economic approach for Africa–India Movement (TEAM-9) initiative for different projects and initiatives [18]. Under the TEAM-9 initiative, New Delhi provides LOC through Exim Bank to finance for setting up of various social and economic projects by Indian companies in those countries, with the government playing the role of a facilitator and provider. Like India–Africa Hydrocarbon Conference and TEAM-9 Initiative, India has unveiled a new strategy of hosting the African countries under the India–Africa Forum Summit. Unlike the above two approaches, this is a non-sector-specific policy for broader economic cooperation, where resources have been placed with high importance in their bilateral relations and multilateral engagements. In the first India– Africa Forum Summit (2008), India offered $5 bn (£2.5 bn) credit and hundreds of millions of dollars of financial help to the African nations. Since 2008, India–Africa Forum Summit has opened the strategy of aid-for-oil by extending credit in the form of soft loans to the African countries. Congruence to it, and significant to this initiative, in the 2015 India–Africa Forum Summit,8 where 54 countries participated, New Delhi increased its assistance to African countries, with a $10 billion concessional loan over the next five years, apart from $7.4 billion that was announced in the first India–Africa Forum Summit. Indian government has also announced 50,000 scholarships for the African students, whom the government treated as the “new links” between India and Africa [19]. India is actively promoting trade with Africa in recent years. Encouraged by the “Focus Initiative” in Latin America, and to boost the country’s trade with the sub-Saharan African region, the Government of India launched the “Focus Africa” programme under the EXIM Policy 2002–03. Under the policy, the selected Indian missions will provide business promotion services to visiting Indian exporters/businessmen at a nominal fee by setting up business centres in Africa. Firms

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in India exporting to these markets will be given “Export House” status subject to a minimum export of Rs. 5 crores [20]. The programme initially focused on seven major trading partners in the of sub-Saharan Africa: Ethiopia, Tanzania, Nigeria, South Africa, Mauritius, Kenya and Ghana. Later, the programme included 17 more countries, and all these countries together constitute about 70% of India’s trade with the sub-Saharan African countries [15]. As the global landscape of development for Africa is drastically changing, India has greatly scaled up its cooperation with the African countries within the context of various initiatives at the international level. In this perspective, the New Partnership for Africa’s Development (NEPAD), the new model of growth and moral consequence of growth, has come up with tangible projects to improve people’s lives in Africa.9 India’s $200 million credit line, secured through the new India–Africa Fund of NEPAD, is being accessed by African countries. More to mention, the India–Brazil–South Africa (IBSA)10 dialogue forum in its existence on economic imperatives formulates the agenda of cooperation on the spirit of South–South cooperation.

2.3 Chinese Resource Diplomacy-Where Does India Stand? China in past, which had averaged an annual growth of 10% for the three decades until 2010, required substantial volume of energy to sustain its momentum of growth. Even its economic growth dropped to 6.7% [21] in 2016, the country still poses as an important market for the oil-producing countries. Its oil consumption is second worldwide [22, 23], and International Energy Agency has projected that China will become the largest consumer of oil in the world by 2030, surpassing the USA [24]. Once the largest oil exporter in Asia, China has turned as a net importer in 1993 and surpassed America as the world’s largest importer of oil in the current scenario. Africa is China’s second-largest source of crude imports, after West Asia, and receives 1.4 million (22%) barrels per day from the continent [23, p. 10]. The major suppliers of energy to the Chinese requirement include Angola, the Republic of Congo and South Sudan. In its quest to secure resources, China engages African countries through commercial, political and strategic shifts that most of the countries do in the international energy market. However, its approaches like “no strings”, “by all means necessary” [25], low-cost financing, cheap labour for infrastructure projects, separating business from politics and frequent trips to the African countries by the Chinese leaders are some of the unique and largely successful efforts Beijing pursuing in its resource diplomacy, to which other countries may not match, even in future. Beijing has a mammoth trade, and economic assistance and investment deal with the African nations, and retains an almost unparalleled ability to compete with other players in the region [25]. Moreover, Beijing offers an alternative route to African countries as an “Asian Driver” in its grandiose Look East Policy—a pragmatic and fundamental approach to which African nations have adhered to resolve continent’s hardships [26]. Compliment to this rhetoric, the “go out” strategy, according to Tan Zhuzhou, the then President of China Petroleum and Chemical Industry Association

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(CPCIA), involves Chinese firms proactively going out to other parts of the world and applying their technical expertise and financial resources for the exploitation of oil and resources there [13, p. 210]. On the other side of the trade, Africa’s present-day relationship with China draws its inspiration from historical and historic relations of the past. This is in consistence to the fact that in 1980s when China had the political trouble and suffered the sanction imposed by Western countries, the first of foreign presidents, prime ministers and foreign ministers who broke the ice and came to visit China were all from the African continent. Likewise, when Africa was “forgotten” by the Western world, China continued to strive to improve its relations with Africa [27]. For Africans, China is a power which fought for their decolonization and independence. In many situations, the troubled Africa finds West and its economic reform strategy of Structural Adjustment Programme (SAP) and Washington Consensus11 as an illusion and disappointment to address and resolve decades-old Africa-specific internal problems of underdevelopment, socio-economic realities and political issues. There have been the African perceptions that the IMF and World Bank policies have resulted in ill governance, political instability, social challenges and economic hardship in the continent. On the other way, Beijing offered, and still extended an alternative route to African countries as an “Asian Driver” in the grandiose of its “Look East Policy”, a pragmatic and fundamental approach to which African nations have “adhered” to resolve continent’s hardships with the hope for a progressive change. Beijing strongly prefers to present its activities in the form of two-way exchanges, reciprocal cooperation, parallelism and equality on the basis of cooperative exchanges rather than the donor–recipient relationship between the West and African continent. China never claims that it has a “philanthropist” approach for the African nations; rather, the relationship is based on “mutual benefits” and win-win situations [26]. It is an established fact that the ethnic conflicts, language barriers, lack of democracy, insecurity and law and order issues in Africa hinder many foreign countries interest on doing trade for the African resources. But this turns an opportunity for China. Beijing gains the “first mover” advantage, i.e. getting tender, lease and licence in different levels of the energy trade. The Chinese simplified, easy access and fast processing of loans and assistance, low interest rates and long-term loans without the strings of democracy have many takers of Chinese help in Africa.12 Since both India and China have a fast-growing domestic requirement for increasing volume of energy consumptions, the energy demands have brought the two Asian drivers closer to the African oil and natural gas markets [28]. This could be validated with the fact that when Indian oil companies first started making a concerted effort to secure projects abroad, they were paying what many international oil companies thought were exorbitant amounts because of the competing bids from Beijing and New Delhi that ran up the prices. But Indian companies gradually have seen falling far behind to their Chinese counterparts. The Indian policymakers have recognized the risks posed to their energy security calculations by the intense competition from China [29]. Unlike China, India has no such deep pockets in Africa where it could have proved crucial in swinging deals in its favour. So, India is losing lucrative deals or oil blocks to China. This can be illustrated through different instances.

2.3 Chinese Resource Diplomacy-Where Does India Stand?

43

In 2004, India had almost clinched a deal with the Anglo-Dutch energy giant Shell to purchase a 50% stake in an oil exploration project. India had offered a US$2 billion in aid and the deal was almost closed. But China moved forward to compete with India by offering Angola US$2.3 billion—a bit more than the Indians offer. Hence, Angola’s state-owned Sonangol apparently blocked an Indian move by exercising its pre-emptive rights.13 In another instance, in 2005, India kept OVL on hold for acquiring assets in Nigeria’s one of the preferred oil blocks on the grounds of security and asked the Nigerian government to take the necessary step to ensure security for further progress on the deal. But unfortunately, the Chinese firms came forward and procured oil assets without putting any conditions [30]. These are not the mere examples, and the instances are many where India has lost several lucrative deals and potential oil fields and natural gas resources to China. While taking into account the Chinese presence in Africa vis-à-vis Indian trade with the African nations, the pertinent question arises: Does China conquer Africa? Does Beijing gain oil concessions and invade African market? Is India going to catch up it? And does New Delhi launch the idea of a fairer, new and more egalitarian partnership with the African nations? In response to all these concerns and questions, the Indian government, in past, made it clear that “India is not in competition with China or any other country in Africa”,14 but for the scholars and think tanks, China is certainly India’s foremost rival in strengthening robust ties with the African nations for resources and resource assets.15 Nevertheless, the only worry for India is the stiff competition it faces from China, which has been providing African countries a complete infrastructure package in return for access to the oil fields. The hard reality is that the India does not have huge capabilities to expand its oil diplomacy, and not in a position to go for barrel-to-barrel energy trade vis-à-vis Chinese energy trade in Africa. Citing India’s position vis-à-vis China in the African resource market, Narendra Modi, the Prime Minister of India, said “New Delhi wants to ensure that it is not entirely overshadowed in the continent by the competitors, which have flooded billions of dollars in Africa in constructing roads, bridges and power systems installations in return for its access to the continent’s energy markets and natural resources” [5]. Although there is competition between India and China in the African resource market, “China is far ahead to India”, said Arvind Mahajan, the Executive Director of the Audit and Consulting Firm KPMG.16 Like energy, India is lagging behind to China in other sectors of trade relationship. While the total trade between India and Africa has increased almost fivefold times between 2005–06 and 2015–16, and stood at US$52 billion in March 2016–1717 and where energy was a potential component, the volume of Chinese trade with Africa in 2016 constituted a mammoth of $128 billion.18 The Indian officials and policymakers admit India does not have the resources to compete “barrel for barrel” with China in Africa.19 At the same time, Indian companies have also been dismayed in their forays as their Chinese competitors have been more generous in their terms.20 Behind this resource competition, there are certain factors which matter a lot for the African countries to look towards as a saviour. Beijing’s edge in global commercial negotiations and transactions and geopolitical dynamics wield political leverages to which New Delhi may not afford. As a veto power permanent member in Security Council of the UN, Beijing has

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helped out the regimes from UN actions: sanctions and punitive resolutions. Many energy exporting countries which have been disturbed due to internal civil wars and international wraths find China as an assertive and clear-eyed power that can protect them from international opprobrium and chastisement [31]. Whatever the nature of divergences both India and China have in their energy trade Africa, in 2006, the Indian and Chinese national oil companies had agreed to bid jointly for stakes in oil blocks and gas fields as a part of their mutual understandings and cooperative arrangements. India’s pragmatism in relation to the pursuits of its energy security includes cooperation with China to mitigate the vagaries of their common global quest [32]. This has been largely an outcome of the realization of the fact, as expressed by the former Indian Petroleum and Natural Gas Minister, Mani Shankar Aiyer, “when we compete in an unhealthy manner to acquire oil assets in third countries, we only end up to the driving costs for each other. We have ended up bidding billions of dollars more in our effort to outbid each other”.21 To avoid this unhealthy competition, some sorts of mutual arrangements and agreements have been made between these two countries. In Sudan, the ONGC joined hand with the China National Petroleum Corporation (CNPC) for stakes in Greater Nile Petroleum Operating Company (GNPOC), which produces the bulk of Sudanese oil, by acquiring the shares of Talisman Oil in 2003. In the same year, the OVL and the CNPC formed another partnership to develop the Malut Basin oil fields in Sudan [33], and thus made India a major stakeholder in Sudan’s oil industry. But the actualization of the agreements or arrangements has been short-lived. Yet, India has approached to China today for a collaborative stand, as they did it in past for acquiring oil and natural gas projects. A step ahead to foster concrete relationship, in January 2006, Indian Minister of Petroleum and Natural Gas Mani Shankar Aiyar had floated the grand idea of Asian Energy Grid. Further, during his visit to China in the same year, he reached an accord-in-principle that, where and when possible, both the countries would cooperate in bidding for third-country energy assets [34]. However, the Chinese response in this context seems supportive but non-committal, with an Indian diplomatic official noting that “Chinese government is responsive, yet nothing concrete has come out”.22

2.4 Internal Security Challenges Oil and democracy, in many instances, do not mix easily. Oil makes a difference, i.e. the more the petroleum an authoritarian country produces, the less likely it will make a foray to liberal values and democracy sprits since oil has a potent effect of revenue generation for the government, the leaders, political parties and the irredentist groups. Aptly, Dick Cheney, the former Vice President of USA, once said, “More the petroleum, less the democracy–the problem is that the good Lord has not gifted us with oil and natural gas reserves where there are the democratic governments” [34]. The oil curse definitely looms large in many oil-rich countries. The “oil curse” perspective is largely defined in terms of a central role of energy (oil and natural gas)

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in increasing risk of violent conflict, economic backwardness, environmental crisis and disincentive for peace. Significantly, at its core lies the abundance of resource, financial motives, opportunities for the rebels to engage in armed conflict and state weakness—characterized by high propensity of corruption, misgovernance, authoritarianism and political instability [35–38]. Nicholas Shaxson, in his book, “Poisoned Wells: The Dirty Politics of African Oil” critically evaluates the role of oil and natural gas in the socio-economic and political realities of Africa. Scholars such as Cyril Obi (2010) and Basedau and Lay (2009) have traced the roots of violence, military rule, dictatorship, corruption, poverty and disease in the parts of Africa, which have been largely happening due to mismanagement of energy resources and conflicts thereupon. According to Shaxson, the natural resources, which could have generating wealth, have adversely shaped the economy due to nepotism, negligence of the local people and abuses—largely practised or supported by African local leaders, irredentist groups, politicians, oil companies and foreign countries. Politicians in oil-economy countries lose interest in their citizens, since they try to get access to easy money and free flow of cash. Unequal access to the benefits of natural resources has created a stark economic disparity and societal divisions. The oil has a destabilizing “push-pull” effect since it pushes people of a country apart as they fight each other for the cash; and then, it pulls them together again as they seek to remain associated for the oil [39]. The offshore oil wells are assumed better secured than the onshore blocks. But, in Nigeria both the onshore and offshore oil wells have been subjected to attack by the militant groups. In 2008, rebels from the Nigeria’s militant group, Movement for the Emancipation of the Niger Delta (MEND) attacked an offshore rig which has been 120 km of the coast. In the Niger Delta region, oil siphoned from the pipelines is processed in the illegal refineries across the Imo River which is conducive for operation, and thus further pollution of water in this river.23 Taking the advantage of the slippery nature of oil revenues, the extractive industries, many times, avoid public explanation, likewise, governments of the oilproducing countries. The governments of the oil-rich countries often use these moneys to keep a large fraction of their spending off the books, and hidden in the services of the national oil companies, whose finances are exempted from public scrutiny. Cameroon revealed just 46% of its oil revenues between 1977 and 2006 and the remaining 54% could not be brought to the public notice. This is in congruence to what the Transparency International claims that the country is one of the most corrupt countries in the world. Colonel Muammar Qaddafi of Libya survived international sanctions by using tens of billions in cash that had been secretly hidden in Tripoli to fund loyalists and hire mercenaries. In the wake of Arab Spring in 2011, according to the New York Times, it was hard to differentiate between the assets of the Libyan government and the Qaddafi family’s assets [34, pp. 59–62]. In Angola, the large chunk of the oil revenues goes to a section of the society who are elites or have vested interests. Hence, a great sense of deprivation, inequality and resulted violent acts has surfaced the country. The main oil-producing region of Angola is Cabinda Province, which is an exclave neighbouring to Congo Republic. This resource-rich region is one of the poorest regions in Angola, whereas Luanda, the capital, is one of the most expensive cities in the world. Many times, the production and sharing

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agreements between the Angolan government and multinational companies are not disclosed to the public and the governments of the respective provinces. If the data is revealed by the government, it is incomplete and inconsistent, and the benefits of energy revenue largely goes to the different elites groups of the country. The Nigerian government fails to share the benefits of oil production. Although a formula for the distribution of revenues between the federal government, the governments of the federal units and the local authorities exist, yet very meagre amount of money goes back to the oil-producing localities. This deprivation and inequality are one of the reasons for which the pipelines are being illegally tapped, oil bunkered and petroleum sold to the neighbouring countries like Benin, Cote d’Ivoire and Senegal, and the illegal oil revenues in Africa constitute billions of US dollars per year [40]. In the recent past, the Nigerian oil and natural gas fields were under intense shutdowns, mainly due to banditism, terrorism and local criminals stealing oil from the pipelines. The biggest victims of these shutdowns included Shell (447,000 bbl/d), Chevron (70,000 bbl/d) and Agip (40,000 bbl/d) [41]. The Royal Dutch Shell in 2008 was forced to shutdown its production unit at the Bonga oil field in the Niger Delta region of Nigeria after militant attack. In 2007, 11 Indian employees were abducted; and several Chinese company staffs have been victims of such acts in Nigeria and Sudan [42]. In spite of an offer of $1bn to $2bn been settled to win the auction for ONGC to acquire a stake in the Nigerian oil field Apko, the Indian government blocked the deal due to risk and insecurity factors prevalent in the regions close to the oil fields [41]. Likewise, a Nigerian licensing round for the Block 45 in 2007 was refused by ONGC-Mittal due to security reasons.24 The irredentist or militant groups like MEND and Federated Niger Delta Ijaw Communities (FNDIC) in the Niger Delta region are the biggest challenge to energy business in this delta region. Both the groups often have been involved in terrorist attacks, kidnappings and other forms of criminality, with the goal of isolating the region, acquiring a share of profit from the production of oil and control over energy production and energy infrastructures. The increase in the activities of these irredentist or militant and such other groups in the region is provoking not only serious challenges to the energy infrastructure, but also dramatically increasing the cost of production and thus discouraging investment in oil and natural gas sectors. In Angola, there is an extremely dreaded element lying behind this aura of tranquillity and development of oil fields. One of the most important oil production areas of Angola, as discusssed earlier, is located in an exclave the Cabinda region, bordering the Democratic Republic of Congo and Congo-Brazzaville with the only open access to the ocean. Exploration activities in this region are largely relented, and the area is disrupted by the actions of the Front for the Liberation of the Enclave of Cabinda (FLEC) where the risk of major conflicts is always potent and imminent [43]. Chad’s President for Life, Idriss Deby, also faces growing internal opposition from a rebel group, known as Front uni pour le changement or United Front for Democratic Change (FUC), which it claims is being covertly funded by Sudanese oil mafias. The FUC is not only a threat to political stability and energy insecurity in Chad but also its tentacles spread to Darfur [44] and its neighbouring areas— Sudan and South Sudan. The ongoing conflicts between Sudan and South Sudan and civil wars in both the countries have turned both the countries energy insecured.

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Apart from the disputed oil-rich border regions, Sudan has energy infrastructure and South Sudan possess large-scale oil and natural gas reserves. However, following the disputes between these two countries, the OVL has discontinued its crude oil production in South Sudan.25 Apart from these insecurity issues, there are two other important instances where countries like India are apprehensive of investing in oil assets in Africa. The recent findings of oil in the Puntland region bring Somalia closer to the radar of India from where it can import oil. But the risk of piracy under the grab of “state collapse” limits India’s approach to Horn of Africa.26 Further, the “Arab Spring”, although had little impact on India’s energy import, yet New Delhi was much concerned on its energy trade and investment in Northern African countries like Egypt, Tunisia, Libya and Algeria. There are various rebel groups who are fighting for the control of illegal oil markets in Africa. For example, in the anticipation of oil boom in 1970s, conflicts had erupted between various ethnic groups in Nigeria and civil war broke out. The conflicts in Africa, many times, have been fuelled by political leaders, political parties in power and military forces, who channelize the profits of the oil and resources to those groups which serve their interest best, and if required arms and ammunitions are supplied to the groups or factions. Since these types of situations created troubles for energy trade and investment, the multinational companies (MNCs) often try their best to engage the local communities in their exploration activities and prosperity. But, this initiative creates a new type of conflict and fighting between those who receive and those who do not receive, and thus the companies become the target of those who did not receive. Due to government mismanagement, the companies face multiple burdens. In 2013, the Anglo-Dutch company Shell in Nigeria faced action in the International Court of Justice, Hague, where the court ordered the company to pay for environmental damages due to its “negligence” and “lack of care”. This verdict was an outcome of the situation that developed between 2004 and 2007. During this period, several attacks happened there on pipeline and oil infrastructures, and thus spilling of large quantities of oil which polluted villages, ponds and farmland. Nevertheless, it is the company’s responsibility to pay for the damages, but law and order situation belongs to the host government, and ironically, the company paid for the mismanagement of the government and law and order problems of the host country [45]. “Booty Futures” in Congo (Congo-Brazzaville) and a “Splodge of Wonga” in Equatorial Guinea have surfaced issues with a different kind. The rebels used financially sophisticated ways to raise money from the energy resources by selling what can be interpreted as “booty futures” [34, pp. 275–276]. When the insurgent leaders are well connected and have a good chance of winning or getting of power, they sell off the right to extract the resources that they hope to control subsequently. Here, the rebels are neither selling oil nor extorting money from the country’s oil producers; instead, they are selling the future rights to an oil concession, which can only be redeemed when the insurgent group (s) comes to power. Both Denis Sassou-Nguesso and Pascal Lissouba of Congo-Brazzaville used this tactic to generate revenue for their own interest and power. In their rivalry, Elf Aquitaine (now Total) oil company was the centre of controversy. While Denis Sassou showed bias for the company,

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Pascal Lissouba acted against the company’s operation in the country.27 The booty futures also led to other kinds of mayhem in past. In March 2004, foreign mercenaries, led by Simon Mann, a well-known British mercenary based in South Africa, attempted to overthrow the Theodoro Obiang Nguema Mbasongo government in the oil-rich Equatorial Guinea. This civil war was basically sponsored in the form of a large pile of cash, better known as “splodge of Wonga” [34, pp. 177] or “Wonga Coup”, raised from the sale of booty futures [46, 47]. In the coup, all wanted to get benefitted. Severo Moto was president aspirant, Mann was offered with sixteen million dollars and a lucrative set of government contracts, and the mercenaries were promised a financial benefit. If the coup would have been materialized, a large chunk of oil block and revenues would have been spent for fulfilling promises he had made to the mercenaries and its leader. Oil explorations and mismanagement have environmental implications in Africa. For example, the oil exploration in the Niger Delta has created a situation which has led to the pollution of wetlands, mangroves and habitats, and thus the livelihood of the thousands of local people have been at stake in this region. The illegal tapping of pipelines, as mentioned above, pollutes the large areas of Niger Delta. According to the United Nations Environment Programme (UNEP), there is the massive environmental damage and degradation in the Niger Delta.28 The pollution is extensive with toxic hydrocarbons which reaches the groundwater and thus effects the aquatic flora and fauna. A recent study and report by a group of scientists at the University of St Gallen in Switzerland revealed that the children born within 10 km (six miles) of an oil spill were likely to die twice in their first month. “Even if there is an oil spill three or four years before the conception of child, it still has a strong negative impact on the future growth of new-born baby” [45]. Although the report did not find at what actually leads to death, yet it is the fact that the crude oil spills on both agricultural and barren land seep into the soil, air and water table. The oil spill releases harmful chemicals such as toluene and benzene. The toluene can cause liver and kidney damages, while benzene is known as human carcinogen that damages DNA and foetus. The onshore spills release toxic fumes which cause fires, death of animals, plants and microorganisms. Further, when the respiratory tracts are blocked by benzene or toxic fumes particulates, health issues like asthma, bronchitis, emphysema, drowsiness and the loss of concentration develop. In Africa, hundreds of oil spills happen every year. Although some of the spills are accidental, others are largely due to tapping of pipelines and illegal bunkering of oil wells and gas fields.29 In Chad, a 1000 km oil pipeline-connecting Chad and Cameroon, with the funding of the World Bank, went through the fertile agricultural land in Southern Chad, Virgin rainforest and the territory of the indigenous pygmy group. These acts of the government not only displaced the local population living there but also destroyed the agricultural land. It was expected that the government will spend a portion of revenue generated from the pipeline infrastructure for the adequate settlement of the displaced people and reforestation measures, but the profits went otherwise. When the first profits started flowing, the Chad government, involved in a civil war with the radical Islamic insurgents, redirected the oil revenues for the buying of weapons. This was largely done on the instructions and legislations made by President Idriss Deby,

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according to whom security expenses were also constituted part of the country’s development [48].

2.5 The “New Scramble” for Resources? The increasing demand for energy requirement at the international level, according to the Institute for the Analysis of Global Security (IAGS), will lead to increase of energy demand and completion among the nations for strategic resources [49]. The countries here inferred include countries from Europe, USA, Japan, South Korea and China. In an extreme sense, this group of countries is called “resource hungry” and “energy thirsty” nations. However, on some instances India has been dragged by the colonial or neo colonial powers under this category. The USA although looking more towards its own domestic production and reduced its import, yet it has stronghold in the global trade and investments. The rhetoric of “new scramble for Africa”, “dirty politics for oil”, “African Poverty”, “intervention” and “blood oil” have surfaced in the African energy geopolitics and global energy security [50, 51]. Kofi Annan, the former UN Secretary General, noted in 2006, said that although the foreign investments in Africa have increased by 200% yet foreign investments have largely focused on extracting natural resources rather than developing native economies.30 The statement, no doubt, revealed that Africa is witnessing “unprecedented boom in oil and natural gas” and countries find this region as a hot destination. The changing international dynamics work behind this energy quest, notably the rising powers of India and China. Although the rhetoric of “new scramble” draws comparison with the onset of imperialism in the late nineteenth century, yet there is little agreement about whether the argument of new scramble is constructive. Some analysts portray contemporary Africa as subject to a new phase of US imperialism; others depict the Chinese as new imperialists; while others dispute theory with “utility” of foreign investment, which proposes that increased external involvement in Africa provides greater scope for African economy, growth and development. However, there are some minimalist approaches which view “the new scramble” as a product of three important factors. First, the end of Cold War and the rising of Southern powers like China, India and other newly industrialized countries have intensified economic and strategic competition with the established powers, like the USA, the European Union (EU) and the Organization for Economic Cooperation and development (OECD), second, intensification of struggle for global control of key resources and resource bases and thirdly, a mix of state agencies, international players and multinational companies, which intensifies in their identity and alignments. However, there is near unanimity that the new scramble in Africa has been galvanized by the economic powers urgent quest for energy security due to the increased global demand for hydrocarbon resources in the light of projected shortages, demands and threats. The rhetoric of new scramble for Africa has come under critical introspection today [52]. France, a former colonial power, has been a pioneer in hosting grand summits of the Francophone countries where the African leaders participate. Many

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African leaders view this strategy as an hangover of French colonialism in the form of neocolonialism. Radical African leaders such as late Thomas Sankara of Burkina Faso used the annual Franco-African summits as a forum for criticisms against neocolonialism and imperialism. Further, there has been French interventions and involvement in the internal affairs of many African countries, and the US idea of United States Africa Command (AFRICOM) is extensively looking out for military alliances or partners from the continent. The AFRICOM is largely a response to the growing Beijing’s presence in Africa [53]. Yet, the African nations are very cautious of American intentions in the continent. A number of African countries, such as Swaziland, Nigeria, Lesotho, Ghana, Uganda, Morocco, Namibia, South Africa, Botswana and Kenya, have expressed deep concern over Chinese cheaper exports and its adverse impact on domestic products, employment and bankruptcy of the nations in the region [54]. The protests by the South African trade unions in 2006 galvanized Thabu Mbeki, the former President of South Africa, to warn China the risk that “Africa could fall into a colonial trap, and the dumping of goods had to stop” [55]. Introspecting the impact of Chinese industry on the African economy, the former Chairperson of African Union (AU) Alpha Oumar Konare warned the “resource-hungry economies that craving for the continent’s resources will have to obligate themselves for real investment that benefits the African continent” [56]. In 2006, the US National Security Strategy report warned China for its “old ways of thinking and acting” for energy resources. “The successive governments of China, according to this report, are expanding trade, but acting as if they can lock up energy supplies across the world or seek to direct markets instead of opening them up—as if they can follow a mercantilism—inherited from a discredited era”.31 Alongside, the USA is also criticized, “Chinese cooperation with the disreputed regimes reflects Beijing’s interest in securing access to resources in the same manner that US cooperation with Saudi Arabia—where the human rights issue hangs over” [57]. However, the Chinese policymakers and scholars are quick to reject the criticisms that China’s engagement with Africa is “resource-driven and exploitative” and insisting that it has consistently taken the path of “cooperation with Africa on the basis of sincerity and mutual benefit”. The fact is that the Chinese oil companies are entering oil-rich African countries through state-led resource diplomacy, and the Chinese government claims that its energy diplomacy has a lot more to offer resource-rich African countries, on better terms and developmental benefits [30, pp. 183–186]. In the words of He Wenping, the Director of the African Studies division of the Chinese Academy of Social Sciences in Beijing, “The African countries have more choices with China’s coming with a greater say for the African resources” [58].

2.6 Could Energy Deficit Hinder Export? In Africa, about 57% of the population lives without access to electricity which hinders continent’s economic growth and development.32 It is the most electricitypoor region in the world. From the existing scenario to the present, the demand for

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energy is set to rise with an increasing population, urbanization and economic productivity. Because of the low installed capacity and an unreliable energy grid, there is less consumption of energy and access to it. Even those connected to the power grid, an average of 54 days of power outage happened in a year that constitutes 15% of the total year [59]. In spite of its large exports, the continent’s 930 million inhabitants consume the least amount of energy per capita, and the whole continent consumes only 9% of its total oil production. Its share of world energy consumption is only 3% compared to its 14% share of the world’s population.33 The pressing energy requirements in Africa have forced the commercial sectors to purchase the expensive generators to bridge demand supply gap. But the generator power is very expensive and on an average, a staggering four times more than the price of grid power, and thus who depends on it bears higher operational costs than their counterparts elsewhere in the country and outside. This is true not only for business in heavy sectors but also banks and supermarkets. Hence, energy is disproportionately and inappropriately a costly business in the African continent. The various countries in Africa provide subsidy in their supply for domestic consumption, specially the households. The governments in Africa are spending US$21 billion a year on fuel subsidies, including subsidies covering utility losses. The vast majority of these subsidies are spent in North Africa, as well as in sub-Saharan Africa, such as Angola and Nigeria [60, 61]. Yet, the poor economic conditions of the people question the affordability aspects of energy security in Africa. The affordability is one of the 17 Sustainable Development Goals, which has been set by the international community and is the need of the African countries [59]. More disappointing fact is that the sub-Saharan Africa, where the average annual electricity consumption is 488 kWh per capita, is equivalent to 5% of US per capita consumption [62]. This average has been pushed upward by South Africa’s high electricity access rates, and if South Africa is excluded, the annual electricity consumption in sub-Saharan Africa is only about 150 kWh per capita [61, p. 16, 67]. Countries with low electrification rates are less developed and have lower GDP per capita consumption, and thus this affects adversely economic opportunities, healthcare services, education, life expectancy and overall human resource development in the African countries. Despite the increase of primary energy consumption of 3.3% (461.5 million tonnes oil equivalent)33 per year in Africa, which is much faster than the global average of 1.3% per year, its per capita energy consumption is world’s the lowest [63]. It is projected that in 2040, Africa’s energy consumption will rise to 127% of its present situation34 which implies that there will be a huge gap in demand supply chain to meet regions energy requirements.

2.7 Can India Have a Better Footprint? Prospect of India’s opportunities in African oil and gas sector, in spite of challenges as described above, could be analysed through the goodwill that India has earned in Africa which assumes great hope and aspiration for strong bilateral and multilateral

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cooperation between India and Africa in the energy sector. Accordingly, some of the promising areas of cooperation prospects for a brighter future. First, unlike the external countries as criticized above, India has been projected as reliable partner for African growth and development. Historical, historic and positive relationship between India and Africa can reshape the emerging energy needs of India. The African goodwill for India has been galvanized with the acclamation showered by the African leaders on India’s development-centric approach and their admiration for India for being a rising economic and knowledge power. Thabo Mbeki, the former President of South Africa, lauded India for its help in the reconstruction and development of the African countries and stressed on increasing of cooperation between the two. Both India and the African leaders have been succeeded in forging a more contemporary partnership, where the energy cooperation gets elevated to a higher trajectory. Second, India–Africa Hydrocarbon and Exhibition, India–Africa Forum Summit level meetings, Indian Technical and Economic Cooperation programme (ITEC), TEAM-9 initiative, LoC support, NEPAD, Brazil-Russia-India-China-South Africa (BRICS) and India-Brazil-South Africa (IBSA) are different platforms where India has finally woken up to the needs of Africa in a more dynamic and conclusive way. These extensive engagements of New Delhi with the African nations will definitely generate more congenial atmosphere for better resource or energy trade with the Africans. Third, two important strategies have been followed by India in response to the Chinese competition: first, working as a true partner and old friend on a win-win basis; second, offering economic aid and assistance in finding low-cost solutions to poverty, improved business relations and contribution towards infrastructural development [33, p. 188, 64]. Fourth, unlike China and Western economic powers, India, so far, has not been projected by any African country with a negative prism; instead, in the opinion of Alpha Oumar Konare, the former Chairperson of the African Union Commission, “India–Africa partnership will contribute for the achievement of Millennium Development Goals in Africa”. This is largely due to the fact, while gaining from Africa’s oil, India gives back and contributes to capacity building of the African nations in the form of providing training and skilled labour force to run the assets effectively. By hiring and training locals at certain stages of the investments and projects, the Indian firms give Africans an equitable stake in the success of the project. The local populaces’ involvement in the Indian projects in Africa has a deep impact for their self-esteem and psyche and thus developing a distinctive sense of accomplishment and pride among the Africans while endearing at the individual level [28]. Hence, the Indian investments on grassroots upliftment projects have integrated Indian firms deeply into the African society and economy. Moreover, the partnership between India and Africa has helped the continent to gain a great deal of India’s experience in the areas of economic development and rise of the middle-class people. Fifth, India is not a loser to Chinese competition in the African continent always. On some cases, New Delhi has thrown tough bargain while coming in competition with Africa. For example, in 2003, a Canadian oil firm decided to sell its stakes

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in Sudan (undivided) and CNPC assertively wanted to purchase those stakes. But, Khartoum turned down the Chinese offer and awarded 25% stake to the Indian firm ONGC [65], which was largely an outcome of India’s robust relationship with the undivided Sudan. Sixth, there are also some of the instances where both India and China have been working together due to their corporate interests. For example, in Sudan, China has built a refinery in Khartoum, and India has built a pipeline to deliver refined products to a nearby port for export, a nice model of cooperation for developing oil sources [66]. Seventh, as the demand for African hydrocarbons from the USA and Europe has decreased in recent years, Africans find India’s growing demand is an opportunity to grab. Therefore, both Africa and India have complimentary interest to cooperate each other on hydrocarbon trade and investment. Eighth, to resolve the rhetoric of “oil curse”, the governments of the oil-producing countries should ensure that all the relevant information, such as production costs, the volume and quality of discovered and undiscovered reserves, the payment of agreements and the federal distribution of revenue are made public. Specifically, the government should make publish what percentage of the profits, accrued from the sale of oil and natural gas, will go into the national budget, what percentage will be spent for development programmes and how much will be shared with the different levels of government in a federal system and to what extent the local community will get benefitted. Currently, much of this information is never made available or inadequately published, which has resulted in mistrust between the government and the civil society in Africa. Ninth, the “10 Guiding Principles for Deepening India’s Engagement With Africa”, as set by the Narendra Modi government in 2018, is expected to increase India–Africa resource trade and investment, while convincing the African nations the need for better mutual cooperation and reciprocity. An Assessment As India is dependent on hydrocarbon resources to meet its huge developmental needs, it seeks to forge a robust partnership with Africa in the oil and natural gas sector. New Delhi has been working with the African nations for enduring partnership, based on sustainable development, mutual respect and mutual benefit. The complementarity between the two reveals improved energy security for India and economic prosperity for all. Huge reserves and exploration of oil and natural gas in the African continent posit great hope and expectation for consolidating existing gains and streamlining future relationship between India and Africa. However, in the process, there are impediments and limitations to reach the deeper pockets of the continent. The domestic constraints in the form of insecurity, energy deficit, external competitions and the new scramble rhetoric exposes the challenges that New Delhi is facing in its quest for energy resources in the continent. Yet, there are the complementarities of interests between India and Africa, which is better exemplified with the growing necessities, i.e. for India, Africa is a source of energy security and for Africa, India is a trillion dollar market and a fast-emerging global power. Although

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there is the huge requirement of energy resources for the Africans, yet the exploration of new oil blocks and rise of renewable in the fuel mix35 will offset the scarcity. In the backdrop of Africa’s energy landscape, both India and China are learning to fine-tune their bilateral balancing act. While India has lost several lucrative oil deals to China, New Delhi seemingly lacks the unyielding strategic drive that Beijing has deftly displayed in the African continent. However, there is the need that New Delhi should follow proactive policy towards African nations, but while vehemently pursuing such approach, the policymakers should be cautious of the fact that commerce between India and Africa should not be in the fashion of West or China and India should not fall under the rhetoric of “scramble”. This comes to the point, as streamlined by the statement of former Petroleum and Natural Gas Minister, Murli Deora, “India must extend a radically different model of aid and economic cooperation that will certainly look Africa aggressively for its oil and natural gas assets to ensure energy security for the country”. What is more expected, India needs to back up the winning template with some concrete steps on the ground in the form of more high-level and extensive visits by Indian leaders to the African countries, opening of more missions in regions where it is underrepresented, special units within the missions to look into and streamline energy resource in the concerned countries, sustained and proactive diplomacy to encourage private sectors to spur their investment in the continent and the pursuance of Africa Policy to streamline importance of Africa in India’s energy map. Fine to mention, the countries in Africa have taken positive steps for better governance of the oil resources. Ghana, Nigeria, Congo, Gabon and Equatorial Guinea have become members of the Extractive Industries Transparency Initiative (EITI) and its Publish What You Pay (PWYP).36 Recognizing the importance of economic and corporate governance for African development the AU, through the NEPAD where India is an active contributor is working to strengthen the capacity of African states to ensure good corporate governance and better resource management. End Notes 1. 2.

3. 4. 5. 6.

7.

BP Statistical Review of World Energy, June 2017, p. 24. According to The New York Times, April 03, 2008, bilateral trade on oil and gas between India and Nigeria was estimated to be $7.9 billion by the end of 2008. In the discourse of statistical data, Sudan is understood in terms of undivided Sudan. Ministry of External Affairs, GOI, 2006. ‘India, South Africa identifies areas for cooperation in oil sector’, http://www. thaindian.com/newsportal/india-news/. Significant to note, in the Fourth India-Africa hydrocarbon conference, 22 African states participated, out of which nine delegates represented at the ministerial level. Statement of Indian external affairs minister Pranab Mukherjee at IndiaAfrica Hydrocarbon Conference and Exhibition, New Delhi, 2007, Asia Times, November 10, 2007.

2.7 Can India Have a Better Footprint?

8. 9. 10. 11.

12. 13. 14. 15.

16.

17.

18.

19. 20. 21. 22. 23.

24. 25. 26. 27.

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The first India-Africa Forum Summit (IAFS) held in New Delhi (2008), followed by Addis Ababa (2011) and New Delhi (2015)). The Business Day, October 20, 2005. According to UNCTAD, IBSA forum is a gateway for intensifying intercontinental trade and investment links. Washington Consensus includes liberalization, privatization and globalization (LPG), deregulation and fiscal austerity related to economic reforms, growth and prosperity along with the introduction of multiparty democracy, good governance and human rights in Africa. Ministry of Foreign Affairs, Government of the People’s Republic of China, 2000. Taipei Times, 16 October 2004. Statement of Manmohan Singh at India-Africa Forum Summit, New Delhi, 2008. The Economic Times, April 9, 2008. Views of Narendra Taneja, the chief executive of the World Oil and Gas Assembly and an energy expert associated with the international oil and gas newspaper ‘Upstream’, quoted in Taipei Times, 16 Oct 2004. Quoted in Utpal Bhaskar, October 18, 2007. ‘India steps on the gas for African hydrocarbon equity’, https://www.livemint.com/Politics/QDTSHuWnEH2T jM4qefsIZP/India-steps-on-the-gas-for-African-hydrocarbon-equity.html. The total trade between India and Africa has increased five-fold during the period between 2005–06 and 2015–16, in, ‘India-Africa Trade and Investment Relations’, Confederation of Indian Industries (CII), https://ciiblog.in/indiaafrica-trade-and-investment-relations/; and Bid to Boost India-Africa Trade, The Hindu, May 21, 2017, https://www.thehindu.com/business/Economy/bidto-boost-india-africa-trade-ties/article18519609.ece. ‘Data: China-Africa Trade’, China-Africa Research Initiative, John Hopkins, School of Advanced International Studies, http://www.sais-cari.org/data-chinaafrica-trade. However, this volume was a decrease from the 2014 data of $215bn. Taipei Times, October 16, 2004. Hindustan Times, 29 Jun 2009. ‘India, China pump up the energy levels’, http://articles.economictimes.indiat imes.com/2006-01-13/news/27448381_1_sinopec-oil-and-gas-cnooc. The Hindu, August 31, 2010. ‘Oil: A Dirty Business in West Africa’, https://worldoceanreview.com/en/ wor-3/environment-and-law/coastal-state-responsibility/oil-a-dirty-businessin-west-africa/. ‘India and West Africa: A Burgeoning Relationship’, Chatham House Briefing Paper, 2007. Business Standard, April 7, 2012. The Deccan Chronicle, May 17, 2012. After assuming power, in 1992, President Lissouba sold the oil fields and contract to oil firms such as Occidental Petroleum, Exxon, Shell and Chevron,

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28.

29. 30. 31. 32. 33. 34. 35.

36.

37.

2 Africa: Existing Potentials with a Promising Future

excluding Elf Aquitaine. However, after a bloody four-month war, Sassou overthrown Lissouba and passed the pending legislation, and once again the government gave Elf Aquitaine a dominant position in the country’s energy market. However, in the same year Sassou lost the government and deals reversed. Further, when Sassou came to power after defeating the Lissouba government in 1997–98 civil war, he became president once again and ended the Congo’s democratic experiment all the oil deals were reviewed, and Elf Aquitaine (Total) was given a preeminent position in the country energy trade and investment. Quoted in, ‘Oil: A Dirty Business in West Africa’, https://worldoceanreview. com/en/wor-3/environment-and-law/coastal-state-responsibility/oil-a-dirtybusiness-in-west-africa/. The oil spills have happened twice-2009 and 2012 at Kogbara Dere (K Dere) in Ogoniland region of Rivers State. UN’s former Secretary General warned of new scramble for Africa, New Zealand Herald, July 2, 2006. Quoted in Chellaney [31, p. 105]. ‘Responding to Africa’s Energy Needs’, European Investment Bank, http:// www.eib.org/attachments/country/energy_needs_africa_en.pdf. Acting Against Energy Poverty in Africa, G-8 Energy Ministers Meeting, Rome, 2009. BP Statistical Review of World Energy, June 2019, p. 8 BP Statistical Review of World Energy: Regional Insight-Africa, https://www. bp.com/en/global/corporate/energy-economics/energy-outlook/country-andregional-insights/africa-insights.html Renewable will constitute 16% of the African fuel mix by 2040 than the existing 1%, in, BP Statistical Review: Regional Insight-Africa, https://www. bp.com/en/global/corporate/energy-economics/energy-outlook/country-andregional-insights/africa-insights.html. The EITI and PWYP are coalition movements of civil society organizations which have been working for the improvement of transparency and accountability in the management of natural resources of the concerned countries.

References 1. Africa’s Major Oil Producers. 2009. http://www.africagoodnews.com/energy/africas-majoroil-producers.html. 2. Africa Energy Outlook. 2014. A Focus on Energy Perspectives in Sub-Saharan Africa, 48–55. World Energy Outlook Special Report. International Energy Agency. 3. Petleva, Vitaly and Arthur Toporkov. 2019. Interview of M/o Petroleum & Natural Gas to Vedomosti, Embassy of India, Moscow, Russia, 4 Sept 2019. https://indianembassy-moscow. gov.in/press-releases-04-09-19.php.

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4. The Indian Express. 2015. India-Africa Forum Summit: Read full text of PM Narendra Modi’s Speech, 29 Oct 2015. https://timesofindia.indiatimes.com/india/India-Africa-summitRead-full-text-of-PM-Narendra-Modis-speech/articleshow/49577890.cms. 5. Sharma, Aseem Gaurav. 2015. India-Africa Summit Takes Ties To The Next Level, 30 Oct 2015. https://topyaps.com/india-africa-summit-ties/. 6. Verma, Nidhi. 2016. (Reuters), India’s 2015 Imports of African Oil Highest in At Least 5 Yrs—Trade Data, 15 Jan 2015. 7. CII/WTO. 2013. In India-Africa Trade and Investment: A Backdrop, ed. Shruti Gakhar and Subir Gokarn, 45. BROOKINGS. https://www.brookings.edu/research/india-africa-trade-andinvestmenta-backdrop/. 8. Business Standard. 2016. India Eyes More Crude Oil Imports from African Nations, January 20, 2016. 9. Rowden, Rick. 2017. Why India’s Foreign Investments in Africa’s Hydrocarbons Are Not a Good Bet. Economic & Political Weekly 52 (42–43): 88–89. 10. Ministry of Petroleum and Natural gas, Government of India. 2019. Namibia is the Latest Country Where India Started Its Investment in 2018. Annual Report 2018–2019: 81. 11. The Business Standard. 2015. ONGC Videsh to Double Africa Investments to $16 bn in Three Years, 28 Oct 2015. 12. Ramachandran, Sudha. 2007. India Pushes People Power in Africa. http://www.atimes.com/ atimes/South_Asia/IG13Df03.html. 13. Pant, Girijesh. 2008. India: The Emerging Energy Player, 222. Delhi: Pearson. 14. Madan, T. 2010. India’s International Quest for Oil and Natural Gas: Fueling Foreign Policy? India Review 9 (1): 6. 15. Gakhar, Shruti and Subir Gokarn. 2015. India-Africa Trade and Investment: A Backdrop, 46. BROOKINGS. https://www.brookings.edu/research/india-africa-trade-and-investmentabackdrop/. 16. Power, M. J. 2015. Realising the Transition, Research Findings, The Rising Powers in Mozambique—Growing High Carbon Partnerships? In Rising Powers, Clean Energy and Low Carbon Transition in Southern Africa Project, Economic and Social Research Council, Brazil. 17. Madan, T. 2010. India’s International Quest for Oil and Natural Gas: Fueling Foreign Policy? India Review, 9 (1): 2–37, 6. 18. Pradhan, S.K. 2011. Are the Elephant and Dragon in Brawl? A Comparative Perspective of India and China in Africa. World Focus xxxii (11–12): 868–874. 19. Sharma, Aseem Gaurav. 2015. Prime Minister Narendra Modi’s statement in 2015 India-Africa Forum Summit. In India-Africa Summit Takes Ties to The Next Level, 30 Oct 2015. https://top yaps.com/india-africa-summit-ties/. 20. Beri, Ruchita. 2003. India’s Africa Policy in the Post-Cold War Era: An Assessment. Strategic Analysis, 222. 21. REUTERS. 2016. China is Confident Economy Grew 6.7% in 2016, 22 June 2016. https:// www.reuters.com/article/us-china-economy-idUSKBN14S0B9?il=0. 22. US Energy Information Administration (EIA). 2015. China: International Energy and Data Analysis, 14 May 2015, 1. https://www.eia.gov/beta/international/analysis_includes/countries_ long/China/china.pdf. 23. Albert, Eeanor, 2017. China in Africa. Council on Foreign Relations, 12 July. https://www.cfr. org/backgrounder/china-africa. 24. World Energy Outlook. 2014. International Energy Agency. https://www.iea.org/newsroom/ news/2014/november/world-energy-outlook-2014.html. 25. Economy, Elizabeth C., and Michael Levi. 2014. By All Means Necessary: How China’s Resource Quest is Changing the World. Oxford University Press. 26. Brautigam, Deborah and Adama Gaye. 2007. Is Chinese Investment Good for Africa? www. cfr.org.

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27. He, Wenping. 2003. China-Africa Relations Facing the Twenty-First Century, 38. Bureau of International Cooperation, Hongkong Maco and Taiwan Academic Affairs Office, Chinese Academy of Social Sciences. 28. Pradhan, S.K. 2011. Contemporary Dimensions of the India-Africa Economic Relationship: An Indian Perspective. World Affairs: The Journal of International Issues 15 (3): 114–135. 29. Obi, Cyril. 2010. African Oil in the Energy Security Calculations of China and India. In The Rise of China and India in Africa, ed. Fantu Cheru and Cyril Obi, 187. London: Zed Books. 30. Mistry, Dinshaw. 2011. Domestic and International Influence on India’s Energy Policy, 1947– 2008. In India’s Foreign Policy: Retrospect and Prospect, ed. Sumit Ganguly, 323–342. Oxford: New Delhi. 31. Chellaney, Brahma. 2007. Asian Juggernaut: The Rise of China, India and Japan, 95. New Delhi: HarperCollins. 32. Kumarswamy, P. 2007. India’s Energy Cooperation with China: The Slippery Side. China Report 43 (3): 350. 33. Cheru, Fantu. 2010. African Oil in the Energy Security Calculations of China and India. In The Rise of China and India in Africa: Challenges, opportunities and Critical Interventions, ed. Fantu Cheru and Cyril Obi, 190. London: Zed Books. 34. Ross, Michael L. 2012. The Oil Curse: How Petroleum Wealth Shapes the Development of Nations, 63. Princeton: Princeton University Press. 35. Obi, Cyril. 2010. Oil as the ‘Curse’ of Conflict in Africa: Peering Through the Smoke and Mirrors. Review of African Political Economy 37 (126): 483–495. 36. Ross, M. 2004. What Do We Know About Natural Resources and Civil War?’. Journal of Peace Research 41 (3): 337–356. 37. Auty, R. 2004. Natural Resources and Civil Strife: A Two-Stage Process. Geopolitics 9 (1): 29–49. 38. Basedau, M., and J. Lay. 2009. Resource Curse or Rentier Peace? The Ambiguous Effects of Oil Wealth and Oil Dependence on Violent Conflict. Journal of Peace Research 46 (6): 757–776. 39. Shaxson, Nicholas. 2009. Poisoned Wells: The Dirty Politics of African Oil. Africa Today 55 (4): 137–138. 40. Kakonge, John O. 2013. Challenges Faced by Emerging Energy Producers in Sub-Saharan Africa: Averting the ‘Resource Curse’, January 31, Global Policy. https://www.globalpolicy journal.com/blog/31/01/2013/challenges-faced-emerging-energy-producers-sub-saharan-afr ica-averting-percentE2percent80percent98resource-cur. 41. India Blocks West Africa Oil Deal. 2005. http://news.bbc.co.uk/2/hi/business/4534412.stm. 42. Sharma, Devika and Swati Ganeshan. 2011. Before and Beyond Energy: Contextualizing India–Africa Partnership, 13. Occasional Paper No. 77, SAIIA and Konrad Adenauer Stiftung, February 2011. 43. Pedde, Nicola. 2008. The Myth of African Oil And Gas. http://www.se2.isn.ch/serviceengine/ Files002FESDP/97959/…E021…/Chapter+9.pdf, and BBC online, 20 April 2006. 44. Engdahl, F. William. 2007. Darfur? It’s the Oil, Stupid. www.engdahl.oilgeopolitics.net/Geo politics-Eurasia/Oil_in_Africa/oil_in_africa.html. 45. Hegarty, Stephanie. 2017. Is Crude Oil Killing Children in Nigeria? BBC News, Kogbara Dere, November 30. https://www.bbc.com/news/world-africa-42168902. 46. Roberts, Adam. 2006. The Wonga Coup. London: Profile Books. 47. Bernett, Anthony, Martin Bright, and Patrick Smith. 2004. How Much Did Straw Know and When Did He Know It. Observer, Nov 28. 48. Muller-Kraenner, Sascha. 2008. Energy Security: Re-Measuring the World, 107. Earthscan (Routledge): Abingdon. 49. Southall, Roger. 2008. The ‘New Scramble’ and Labour in Africa. Labour, Capital and Society 41 (2): 133. 50. Klare, Michael, and Daniel Volman. 2006. America, China and the Scramble for Africa’s Oil. Review of African Political Economy 33 (108): 297–309.

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51. Shaxson, N. 2007. Poisoned Wells: The Dirty Politics of African Oil. London, Palgrave: Macmillan. 52. Okek, Chris Nwachukwu. 2008. The Second Scramble for Africa’s Oil and Mineral Resources: Blessing or Curse? The International Lawyer 42 (1): 93. 53. Cherian, John. 2010. Engaging Africa. Frontline 25 (9): 32–33. 54. Pradhan, S.K. 2010. China’s Economic Engagement with Africa: A Contemporary Scenario. Asian Profile 38 (5): 447–449. 55. Amosu, Akwe, 2007. China in Africa: It’s (Still) the Governance, Stupid. http://www.fpif.org/ fpiftxt/4068. 56. Modi, Renu and Shekhawa, S. 2009. Indian and Chinese investment in Africa: From ‘no alternative’ to ‘many Alternatives. http://www.pambazuka.org/en/category/africa_china/ 60030. 57. Ross, Robert S. 2005. Towards a Stable and Constructive China Policy. NBR Analysis 16 (4): 42. 58. Wenping, He. 2007. The Balancing Act of China’s Africa Policy. China Security 3 (3): 46. 59. Nganga, Michael Waiyaki. 2016. Understanding Africa’s energy needs, 17 Nov 2016. World Economic Forum. https://www.weforum.org/agenda/2016/11/understanding-africas-energyneeds/. 60. Africa Progress Report. 2015. Power, people, planet: Seizing Africa’s energy and climate opportunities. Geneva: Africa Progress Panel. 61. Avila, Nkiruka, Juan P. Carvallo, B. Shaw and Daniel M. Kammen. 2017. The Energy Challenge in sub-Saharan Africa: A Guide For Advocates and Policy Makers. Oxfam Research Backgrounder, 35. 62. World Bank. 2014. Electric power consumption (kWh per capita). http://data.worldbank.org/ indicator/EG.USE.ELEC.KH.PC. 63. BP Energy Outlook. 2018. Country and Regional Insights-Africa, 1–2. https://www.bp. com/content/dam/bp/en/corporate/pdf/energy-economics/energy-outlook/bp-energy-outlook2018-region-insight-africa.pdf. 64. Hate, V. 2008. India in Africa: Moving beyond Oil, Business Day. Africa Policy Forum, 7 July, available in forums.csis.org/Africa/?p =144. 65. Sautman, B., and Y. Hairong. 2007. ‘China and Africa: Policy and Challenges. China Security 3 (3): 86–87. 66. Zhang, Zhijie and Wanli Xing. 2018. Overseas Oil Cooperation between China and India Based on Crude Oil Trade Flow Analysis. In IOP Conference Series: Earth and Environmental Science, 2. iopscience.iop.org/article/https://doi.org/10.1088/1755-1315/153/3/032046/pdf.

Chapter 3

West Asia: Trade and Investment in a Geopolitical Intricacy, and Security Worries

The chapter covers long-standing energy cooperation between India and the West Asian region, a country-specific approach of relationship, an “Asia bound” oil, insecurity aspects due to internal civil wars and external powers involvement, India’s response to the West Asian crisis and security challenges and New Delhi’s balancing approach to regional issues. The chapter throws an insight into how the major traditional oil suppliers’ region has taken so much importance under the Prime Minister Mr. Narendra Modi, and his government’s “Act West Asia” policy. Since US dependency in the region has been decreasing due to its shale energy, India’s role is much expected in the regional geopolitics and international energy architecture. The chapter initially studies the overall trade and investment with West Asian region and subsequently country-specific detail analysis of major suppliers, like Saudi Arabia, UAE, Kuwait, Qatar, Iran and Iraq so as to provide a better understanding of issues involved in bilateral and regional energy trade and investment aspects. Since the region has been in turmoil under different regimes and external internventions, India has faced the challenges of geopolitical dynamics and security threats. Yet, the Indian government has successfully taken steps to ensure energy security for its domestic needs. These situations have been well explained through Iran crisis, Arab oil embargo, Gulf War-I and II, terrorism and other such incidents. India has well maintained its policy of non-involvement and interference in the regional conflicting politics and has maintained a safe distance from external powers involvement in the regional issues which have been well explained in the chapter through the India’s balancing act in West Asian geopolitics.

3.1 Energy—“Asia Bound” The Asian economies have collectively become the largest buyer of hydrocarbons from the gulf region, and this dependence is projected to become even larger as the USA’s and West’s hydrocarbons requirement from the gulf region continues to © Springer Nature Singapore Pte Ltd. 2020 S. K. Pradhan, India’s Quest for Energy Through Oil and Natural Gas, https://doi.org/10.1007/978-981-15-5220-5_3

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3 West Asia: Trade and Investment in a Geopolitical Intricacy …

diminish. On the other side, stronger strategic synergies in the energy and economic domain between West Asia and Asia are making the former region as an integral part of the unfolding Asian growth story. Further, the growing instances of insecurities in the West Asian region have developed the buyer–seller relationship between these regions into a strategic arrangement and collective security architecture [1], sometimes referred as Asian energy security or Asian energy grid. This approach of the countries of concerns echoes that the West Asia energy is “Asia bound”, as hinted by OPEC’s Secretary General Mohammad Barkindo [2]. Most recently, OPEC’s Secretary General, Mohammad Barkindo, further reiterated that Asia would continue to depend on the Middle East for the foreseeable future and the Asia Pacific will be the primary outlet for OPEC and Middle Eastern export barrels” [3]. The global energy demand is expected to rise by 40% by 2035, which is largely due to the economic growth of the non-OECD nations, i.e. developing nations. As the production in West Asia increases by 30%, it will continue to supply much of its crude to the whole Asia, and the demand for West Asian crude will increase to 50% in the next 25 years. Further, till date the major producers of oil in West Asia are the major suppliers of energy to Asia. The United Arab Emirates exports 96% and Iran 86% of their production to the countries of China, India, South Korea and Japan. Likewise, over two-thirds of Saudi oil is consumed by Asia. Iraq’s Deputy Minister of Refining Affairs, Dheyaa Jafar Hajam al-Musawi, said that his country, which sells half of its oil exports to Asia, would increase the percentage to 80% in the near future [3]. The Chinese are the biggest oil buyers from Iran, followed by India [4]. By 2020, it is expected that China will import eight million barrels a day, which would be four times the projected domestic output, for its domestic requirements [5]. Although there is unanimous support between India and West Asia today for energy cooperation, yet the Cold War geopolitical scenario in past had a limited option for the both. During the Cold War period, India had a passive role and a little trade with West Asia, which was largely due to Arab–Israel conflicts and war, New Delhi’s tilt towards Moscow, non-alignment policy and the Nasserite ideology [6]. India’s non-alignment approach and its closeness with the Nasserite ideology of Egypt—which led the formation of the United Arab Republic (U.A.R.) in 1958— an Egypt and Syrian union, overthrow of the monarchies in Iraq (1958), Imamate in Yemen (backed by Saudi Arabia) and the establishment of a Republican state in Yemen, were some of the incidents which had limited India’s energy quest in West Asia. Further, Nasser’s closeness to the Soviet Union made matters worse beyond the projection. All these factors had a lasting fallout as all these geopolitical developments raised serious questions on India’s intentions in this region. However, the end of the Cold War and changes in international political order changed the perception of the West Asian countries towards India. The bourgeoning relations with the USA, the November 2008 Mumbai attack and the Global War on Terror campaign have changed the geopolitical and security dynamics for extensive engagement in the energy sector. The political impetus started with the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) government under the leadership of late Atal Bihari Vajpayee, who had pursued congruence and harmonization with the USA and its allies along with the West Asian nations and developed joint policies under

3.1 Energy—“Asia Bound”

63

the broad spectrum of politics, strategy and security. The 2006 visit of the late King, Abdullah bin Abdulaziz, to New Delhi, the first Saudi Arabian monarch to make such a trip in 51 years, set a landmark step for India–Saudi Arabia or India–West Asia bonhomie. The then Indian Prime Minister Manmohan Singh reciprocated Abdullah bin Abdulaziz’s visit to India by visiting Riyadh in 2010, the first Indian Prime Minister who visited Saudi Arabia in 30 years and signed the Riyadh Declaration, which set the framework for enhanced cooperation in the areas of security, defence, energy and economic cooperation [7]. While the former Prime Minister Manmohan Singh made it an opportunity to nurture and deepen security relations with the Islamic world, the present Prime Minister Narendra Modi has taken the lead under the “Act West Asia” policy. “It is the time for India to Think West and tap into the growth opportunities of the region”, said S. Jaishankar, the External Affairs Minister of India [8]. The Indian Prime Minister Narendra Modi’s triumphant visits to United Arab Emirates, Saudi Arabia, Iran and Qatar, and engaging other strategic players in the region such as Iran, Israel and Palestine, are exemplary for the evolving “strategic partnership” between India and West Asia through the spirit of Act West Asia policy [9]. Describing the India–West Asia relations, C. Rajan Mohan, the international relations expert and strategic analyst, said “After more than a half century of false starts and unrealized potentials, India is now emerging as the swing balancer in the global balance of power architecture. In the forthcoming years, New Delhi will have an opportunity to shape outcomes on the most critical issues of the twenty-first century such as the construction of Asian stability and political modernization of the greater West Asia, while managing globalization” [10]. No doubt, India’s footprint in this region has already been felt and its relatively autonomous strategic calculation has strengthened economic ties and institutionalized long-term energy security calculus. The blossoming energy cooperation with West Asian countries can be contextualized today with some of the recent developments in the global energy market. First, apart from the existing potentials, West Asia is a promising destination for India; second, the whole of West Asia is facing economic strain in the wake of persistent crude volatility of oil price; third, the USA is no longer much dependent on West Asia for energy as it used to be in past because of its shale boom and net energy exports; fourth, the Chinese demand for energy is receding due to their economic slowdowns; fifth, along with economic slowdown, there is a stiff geopolitical competition among the suppliers. Here Russia is a major competitor to bid for the European market.

3.2 Trade and Investment The West Asia today constitutes 836.1 tmb/113.2 tmt of oil, i.e. 48.44% of the global oil reserves and produces 31,763 tbd/1489.7 million tonnes which constitutes about 33.64% of the global share, by the end of 2018. The country Saudi Arabia has the largest oil reserves (17.2%), followed by Iran (9.0), Iraq (8.5), Kuwait (5.9), UAE (5.7), and in the production of oil, Saudi Arabia tops with 13%, followed by

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3 West Asia: Trade and Investment in a Geopolitical Intricacy …

Table 3.1 Total proved oil reserves and production in West Asia by the end of 2018 Oil reservesa

Productionb

Country

Thousand million barrels (tmb)/Thousand million tonnes

Global share (%)

Thousands of barrels per day (tbd)/million tonnes

Global share (%)

Saudi Arabia

297.7/40.9

17.2

12,287/578.3

13.0

Iran

155.6/21.4

9.0

4715/220.4

5.0

Iraq

147.2/19.9

8.5

4, 614/226.1

4.9

Kuwait

101.5/14.0

5.9

3049/146.8

3.2

UAE

97.8/13.0

5.7

3, 942/177.7

4.2

Qatar

25.2/2.6

1.5

1, 879/78.5

2.0

Oman

5.4/0.7

0.3

978/47.8

1.0

Yemen

3.0/0.4

0.2

68/2.8

0.1

Syria

2.5/0.3

0.1

24/1.1

0.04

Other

0.2/0.04

0.04

207/10.2

0.2

Total

836.1/113.2

48.44

31,763/1489.7

33.64

a Reserves

include gas condensate and natural gas liquids (NGLs) as well as the crude oil crude oil, shale oil, oil sands and NGLs (the liquid content of natural gas where this is recovered separately). Excludes liquid fuels from other sources such as biomass and derivatives of coal and natural gas Source BP Statistical Review of World Energy, 68th edition, June 2019, pp. 14, 16, 17

b Includes

Iran (5), Iraq (4.9), UAE (4.2%) and Kuwait (3.2) (Table 3.1). Likewise, the region has 75.64 tcm/2666.7 tcf natural gas which constitutes about 38.24% of the global reserves and its production of 687.4 bcm/591 mtoe constitutes 17.84% of global productions. With regard to natural gas reserves, Iran tops the region with 16.2%, followed by Qatar (12.5%), Saudi Arabia (3.0), UAE (3.0) and Iraq (1.8). In the production of natural gas, Iran tops the region with 6.2%, followed by Qatar (4.5), Saudi Arabia (2.9), UAE (1.7) and Oman (0.9) (Table 3.2). West Asia largely falls in the broad grandiose of India’s energy security map. Virtually, India imports oil from all the countries in the region and invested largely in seven countries, where the blocks are operated jointly or Operation Right lies with the Indian companies (Table 3.3). The region reached to 57% of India’s total imports in 2014 and expected to reach 63% by 2030 [11]. Likewise, the natural gas import from the region is expected to reach 15% by 2030 [12]. India has major energy trading partners in the region such as Saudi Arabia, Iran, Qatar, Iraq, UAE and Oman. Saudi Arabia is India’s top supplier of crude oil with an approximate 20% of its global imports [13]. Over the past many years, India’s energy dependence on Saudi Arabia has risen significantly, i.e. from 268,000 barrels per day in 2001–02 to 25.9 million tonnes in 2008–2009 and 32.6 million tonnes in 2011–2012 [14]. Crucially, Riyadh has given its backing to New Delhi in its bulging energy requirements and exported the crude of 795,000 barrels per day to India from January to April 2015, an increase

3.2 Trade and Investment

65

Table 3.2 Total proved natural gas reserves and production in West Asia by the end of 2018 Natural gas reservesa Country

Productionb

Trillion cubic metres Global share (%) Billion cubic metres Global share (%) (tcm)/Trillion cubic (bcm)/million tones feet (tcf) oil equivalent (MTOE)

Iran

31.9/1127.7

16.2

239.5/205.9

6.2

Qatar

24.7/872.1

12.5

175.5/150.9

4.5

Saudi Arabia 5.9/208.1

3.0

112.1/96.4

2.9

UAE

5.9/209.7

3.0

64.7/55.6

1.7

Iraq

3.6/125.6

1.8

13.0/11.2

0.3

Kuwait

1.7/59.9

0.9

17.5/15.0

0.5

Oman

0.7/23.5

0.3

36.0/30.9

Israel

0.4/14.6

0.2

–

Syria

0.3/9.5

0.1

3.6/3.1

Yemen

0.3/9.4

0.1

0.6/0.5

0.04

Bahrain

0.2/6.4

0.1

14.8/12.8

0.4

Other

0.04/0.2

Total

75.64/2666.7

0.04 38.24

10.1/8.7 687.4/591

0.9 – 0.1

0.3 17.84

a Those

quantities that geological and engineering information indicates with reasonable certainty can be recovered in the future from known reservoirs under existing economic and operating conditions b Excludes gas flared or recycled. Includes natural gas produced for gas-to-liquid transformation Source BP Statistical Review of World Energy, 68th edition, June 2019, pp. 30, 32, 33

of around 4.6% of the year previous year [15]. This increase was largely due to three major factors: first, the economic sanctions against Iran; second, increasing India’s energy requirements; and third, compensating with the loss of supply of hydrocarbon in the global market due to surge of Russian hydrocarbon and American shale energy. However, in 2015, Nigeria had overtaken Saudi Arabia and became the largest crude supplier to India with an approximate 200% rise, i.e. 745,000 barrels per day [16]. Yet, it was for a short period. Identifying India’s pivotal position in Saudi Arabia’s energy market, Abdallah S. Jumah, the former CEO of Saudi Arabia’s Aramco oil company in 2007 said, that his company saw Saudi Arabia as India’s “backyard strategic storage” due to the growing partnership between the countries [17]. Since there is a glut in international oil market and plunge or competitive price looms large in international market, the energy market is largely a buyers’ market today. Indian refiners have already begun to take advantage of this to switch long-term contracts with West Asian oil for spot purchases. The countries in the West Asia are now looking to enhance their share of energy market since the region drives and faces a suppliers’ price war. Significant to this development, Saudi Arabian government is now planning to supply crude to India on its own tankers, thus saving shipping costs of India and passing on the benefits to the refineries of India [18]. Further, Saudi

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3 West Asia: Trade and Investment in a Geopolitical Intricacy …

Table 3.3 India’s investment in oil and natural gas sectors in West Asia by the end of 2018 Sr. No.

Country

Investment/Project

Participating countries and their share

1

Iraq

Block 8, Iraq

ONGC Videsh—100%

2

Iran

Farsi offshore block

ONGC Videsh—40% (Operator) IOC—40% OIL—20%

3

Syria

Block 24, Syria

ONGC Videsh—60% IPR International—25% (Operator) Tri Ocean Mediterranean—15%

Al Furat Petroleum Co.

Himalaya Energy (Syria) B.V.—33.33 to 37.5% Shell—66.67 to 62.5% (Operator—Al Furat Petroleum Company)

4

Yemen

82

Medco—45% Kuwait Energy—25% IOC—15% OIL—15%

5

UAE

Lower Zakum

ADNOC—60% Falcon Oil & Gas BV—0% Inpex—10% CNPC—10% Total—5% ENI—5%

6

Israel

Block 32

ONGC Videsh—25% BPRL—25% Oil India—25% IOCL—25%

7

Oman

Mukhaizna

Occidental: 45% (Operator) Indian Oil: 17%; Oman Oil Co.: 20% Liwa 15%; Total: 2% Partex: 1%

Source: Annual Report, 2018–2109, Ministry of Petroleum and Natural Gas, Government of India, 2019, pp. 78–81

Arabia comes to India’s rescue whenever required. For example, Riyadh stepped up oil supplies to New Delhi when the country cut imports from Iran due to United Nations sanctions (2008–2015). India’s energy imports from the UAE have risen dramatically over the past decade, from 153,000 bpd in 2001–02 to 283,000 bpd in 2013–14 [19]. Regarding energy supply, Iran used to be India’s second-largest oil supplier after Saudi Arabia till India cut its imports due to international sanctions imposed on Teheran. In the context of UAE, the recent visit of Prime Minister Narendra Modi has led to the signing of MOU between the Indian Consortium (OVL, BPRL & IOCL) and Abu Dhabi National Oil Company (ADNOC), and renewal of acquisition of a 10% stake in the Abu Dhabi’s offshore Lower Zakum Concession (operated by Abu Dhabi Marine Operating Company—ADMA-OPCO offshore concession). The concession

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is meant for 40 years, i.e. from 2018 to 2058.1 The renewal of this facility is a major victory for India since there were other competitors too such as the Chinese, Korean and Japanese oil companies. India is expected to enhance its production to one million in this field by 2021 than the existing 7,00,000 bpd of crude oil [20]. Significantly, this is the first Indian investment in the upstream oil sectors of the UAE, and thus transforming the traditional buyer–seller relationship to a long-term investor relationship, and thus security of oil assets [21]. The UAE has been the first contributor to the Indian Strategic Petroleum Reserve, followed by Oman [22]. Under this strategic petroleum reserve agreement, India will have a six million barrels of UAE crude for India’s Puddur (near Mangalore) oil refinery [23] and UAE has agreed to store a portion of its strategic oil reserves in Indian reservoirs which would help make these reservoirs commercially viable [24]. The country has also committed to set up a major inland container terminal in Jammu and Kashmir, which will prove a vital step for the development of the region. The country Kuwait, despite its small territorial size, is one of the top oil suppliers to India. In 1991, India was to import 1.5 mt of crude from Kuwait but it was disturbed due to the balance of payment problem in India in the wake of economic crisis [5]. However, the import was increased with the stabilization of Indian economy afterwards. Kuwait exported 14.7 million tonnes of oil to India in 2008–2009, which increased to 17.6 million tonnes in 2011–2012 and ranked as the fifth-largest supplier of crude oil to India and the second-biggest Gulf Cooperation Council (GCC) supplier after Saudi Arabia. Kuwait Oil is hoping to sign a deal to buy a stake in an Indian refinery, and according to Nabeel Bourisli, the Chief Executive Officer of Kuwait Oil, “India is an important destination to us, and we are at final stages of negotiations” [4]. Kuwaiti is also hoping for the supply of oil to India through a pipeline that will pass through Saudi Arabia, UAE, and reach to Mina al-Fahalterminalnear at Muscat (Oman)—with a likely spur to Qatar. Like UAE, Qatar is a small country but unlikely the former the latter has enormous natural gas potentials and explorations. India has a purchase agreement with Qatar for a supply of 7.5 million tonnes of liquefied natural gas (LNG) over the next 25 years and the first shipment under this agreement reached India in 2004. India has also added additional import of 1.25 million tonnes per annum to this spur. The natural gas imports from Qatar have increased from $2.6 billion in 2006 to $12 billion in 2012, and the imports are expected to rise significantly in future. In 2016, the Ministry of Petroleum and Natural Gas of India, Dharmendra Pradhan, convinced Qatar’s RasGas for the renegotiation of the gas supply contract, and thus the price of LNG import from Qatar was reduced. India imports 8 million tonnes of LNG per annum from Qatar under the contract.2 Further, the government has sent Petronet LNG and OVL team to consider picking stakes in Qatar’s discovered natural gas assets. Prime Minister Narendra Modi in 2016 made a state visit to Qatar, where Doha showed its keenness for energy relationship with India and promised India for $35 billion investment for its petrochemical infrastructures. Very recently, Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, has assured prime minister for further investments [25]. For a long, Qatar has provided about 80% of India’s imported natural gas resources, and New Delhi’s specific interest lies in Qatar’s South Pars field,3 which shares the basin with Iran. But with India emerging as a fastest-growing

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import market for both oil and natural gas resources, other West Asian countries have begun to look India more closely for its requirements and imports. In the context of Iran, since the Iranian heavy crude is cheaper than Saudi and Iraqi oil, there is more demand for Iranian crude, and despite the sanctions, Iran today is one of the top suppliers of hydrocarbon energy to India. Due to the UN sanctions, Iran’s oil exports to India have decreased from 21.8 million tonnes in 2008–2009 to 17 million tonnes in 2011–2012. However, with the removal of sanctions (2015), the energy imports from Iran increased to 473,000 bpd of oil, compared to 208,300 bpd of 2015. The sharp increase propelled Iran into third place, just behind Saudi Arabia and Iraq, among India’s top suppliers in 2016, up from the seventh position in 2015 [26]. The Indian government also committed in 2016 to transfer $6.5 billion it owed to Iran as payment for oil supplies [27]. However, in 2017–2018, India’s import reduced to 396,000 barrels a day due to American President Donald Trump’ reversal approach to USA–Iran deal, signed by his predecessor Barack Obama. On the wake of recent hostility of Trump administration, in mid-February 2018, the Iranian President Hassan Rouhani visited India with his Oil Minister Bijan Zanganeh to deepen strategic relations. To enhance energy trade, Iran has reduced the freight charges by nearly $1 a barrel, and India has committed to increase its import from Iran by 500,000 bpd [4]. During Rouhani’s visit, to promote overall trade between India and Iran, the two countries have signed agreement of Avoidance of Double Taxation and the Prevention of Fiscal Evasion to increase the flow of Indian investment in the energy sector [28]. In the first week of April 2018, Iran agreed to take the natural gas produced from the Farzad-B field, discovered by ONGC Videsh Ltd. (OVL) in the Persian Gulf, where India is expected to invest a worth of $3 billion. This means that India will now not have to develop an LNG export terminal to ship the gas, and the OVL has offered to buy equity in the South Azadegan oil field. The prospects of recently concluded rupee–rial arrangement betweeen the two countries indicate that both the sides are intended more to protect their economic relations in the wake of Iran–USA tangle. In 2001–2002, India imported 76,000 barrels per day (bpd) of crude oil from Iraq, but there was declining trend due to the outbreak of Gulf War-II. In the aftermath of Gulf War-II, oil trade between India and Iraq flourished further as Baghdad looked for sell of its crude oil and revamped foreign investments for its damaged hydrocarbon energy fields. Accordingly, the Iraqi oil exports to India in 2004 increased to 14.960 million tonnes in 2009–2010 and 24.51 million tonnes in 2011–2012. This rapid boost was largely due to the UN sanctions imposed on Iran for its alleged nuclear weapons program, where Iraq stepped up to fill up the vacuum and posed as the second-largest supplier of oil to India after Saudi Arabia [29]. Traditionally, Saudi Arabia has been India’s top oil supplier, but for the first time it was dethroned by Iraq in 2017–18 Indian fiscal year. Likewise for the second year in a row, it also turned India’s top crude oil supplier, meeting more than a fifth of the country’s oil requirements in 2018–19 Indian fiscal year. According to the data of Directorate General of Commercial Intelligence and Statistics, Iraq sold 46.61 million tonne of crude oil to India during the fiscal year 2018–2019, a two percent more than 45.74 million tonnes it had exported in 2017–18 fiscal [30]. In 2013, both Manmohan Singh,

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the former Prime Minister of India, and Nouri Al Maliki, the former President of Iraq, inked a key pact for the conclusion of a 13-year-old contract for the exploration of Iraqi block estimated to hold 645 million barrels of in-place reserves [31]. Iraq has offered Kifil, West Kifil, Merjanand Middle Furat oil fields to the Indian oil companies on nomination basis. The contract for all the four oil fields would be a service contract where OVL will be paid a fixed per barrel fee for its efforts in exploring and producing oil. This is the first time in the recent past that an oil-rich nation has offered fields to India on nomination basis. Giving blocks on nomination basis meant offering India access on a preferential basis, and thus the Indian companies not required to compete with other international players in the bidding process to acquire stakes. This is in sharp contrast to what Iraq, like other West Asian countries, in past, had asked India to participate in an international competitive bidding rounds to get the oil and natural gas fields. Further, Baghdad has reassured New Delhi that Iraq will meet its oil requirements, as well as its future needs.4 Significant to say, Iraq has already guaranteed India with a host of lucrative deals, so as to increase imports from it. In 2014, the Iraqi government had also assured India to double the credit period to 60 and waive off opening of lines of credit (LOCs) to India if India plans to import more than the existing level. Iraq has also agreed to renegotiate the contracts for Block-8 with the OVL. The Block-8 is estimated to hold 645 million barrels of in-place reserves, of which 54 million are recoverable. On the other side, Iraq has agreed to consider for investing of the upcoming 15 million tonnes per year oil refinery of Indian Oil Corporation (IOC) at Paradip in Orissa. The IOC has been training Iraqi oil officials in downstream refining and marketing. The possibilities for cooperation in the gas sector, including import of LNG imports from Iraq have already been discussed at different levels of Joint Commissioners’ meeting between these two countries. The Indian oil companies are keen to participate in the multibillion dollar Nassiriya integrated oil project in Iraq.5 The OVL, along with other 11 companies, has been shortlisted to bid for development of Iraq’s $4.4 billion Nassiriya oil field and the construction of a 15 million tonnes refinery there. The ONGC will develop the Mangalore Refinery and Petrochemicals Limited (MRPL) to the level of 300,000 barrels per day refining capacity with the anticipation of getting more crude from the Iraqi wells [32]. In 2015, India’s Hindustan Petroleum Corporation Limited (HPCL) increased its crude imports from Iraq by 8% (65,000 bpd), as it took up better and favourable terms—offered by Baghdad. Recently, the biggest oil refiner of India, the Indian Oil Corporation (IOC), has increased oil volumes from Iraq by 5%, i.e. 284,000 bpd, as it took the advantage of extended credit period of 60 days. The company has a deal to buy 60,000 bpd of Basra oil from Iraq’s State Oil Marketing Organization (SOMO), and a 40,000 bpd from the oil company Total in Iraq. The IOC is now looking for an increase of crude oil imports from Iraq, which is 284,000 bpd6 so as to meet crude requirements of the Paradip Oil Refinery which has the capacity of 300,000 bpd [31]. In addition to all these major destinations, India has trade and investment with other countries in the region. At al-Furat in Syria, in 2005, ONGC and CNPC of China jointly picked up Petro Canada’s 37% stake for $573 million [33]. India has already

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invested in Oman and Yemen, and Bahrain has posed as one of the new destinations for India since new discoveries have begun in the country.

3.3 Geopolitics and Security Challenges According to S. B. Cohen, the Geopolitical Analyst, nothing better reflects the Middle East region (West Asia) than its instability, uncertainty and unpredictability in the energy market [34]. The problems and crises in West Asia have immediate impacts on West Asian energy supply and global energy market. The problems in the oil market, coupled with widespread future uncertainty, have led to panic in the investment of energy sectors and flow of oil supply. Instances are many in this context. The world witnessed energy crisis for the first time in 1951 when the Iranian government nationalized the oil industries in the country which led to the loss of production of 924 million barrels of crude oil. The Syrian transit fee issue (1966–1967) and the Six-Day War (1967) resulted in total loss of 63 million barrels and 120 million barrels of oil. The oil embargo of the West Asian countries against the USA in 1973 resulted in loss of 468 million barrels of crude supply [35]. Before the outbreak of Iranian Islamic Revolution (1978–1979), Iran was producing 6 million barrels of oil per day [17] and with the outbreak of revolution, oil production and export in the country virtually led to the shutdown of the oil industry, and during November 1978 to April 1979 there was the total loss of about 630 million barrels of Iranian oil [35]. Further, in the aftermath of revolution, the Shah government and Khomeini rule developed a sense of uncertainty of investments and insecurities of oil supply. On the other way, the spot market prices increased, and the oil companies created stocks in anticipation of further price increase and thus, there was an artificial rise in the world oil demand for 3mbd, which was above the actual energy consumption [5]. Like Iranian Revolution, Iran–Iraq war (1980–1988) resulted in an upward pressure on the prices and the crude price doubled from US$ 14 to US$ 35.7 during the period and gross loss of 297 million barrels of oil. In 1990, Iraq invaded Kuwait and the United Nations embargoed on Iraqi oil and natural gas resources. As a consequence, there was a halt of production of about 4.3 mbd (7% of the world supply) and the total loss of 420 million barrels [35]. Therefore, the crude prices increased from US$ 16 per barrel in July 1990 to US$ 36 per barrel in September 1990. In August 1996, the USA imposed a unilateral trade embargo against Libya and Iran and pressurized the international community not to invest more than US$ 20 million in their oil and natural gas sectors. Non-compliance of the US diktat was subjected to penalization by the US government. The US invasion of Iraq in 2003 led to the loss of 1150 million barrels of crude between 2003 and 2008 [36]. The US–Iran nuclear imbroglio and the Iranian nuclear dilemma caused UN sanctions against Tehran in 2006. The tightening of sanctions against Iran for its failure to comply resulted in total loss 860,000 bpd in 2012 than the previous year’s 2.2 million bpd and till the waive of UN sanctions in 2016 Iran lost $160 billion of oil revenue.7 But, the withdrawal of USA from the deal in May 2018 led to the reversal of Iranian production and supply of energy resources.

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The reimposition of sanction by USA and its insistence on other countries for similar action by 4 November 2018 created chaos in the global energy market8 and Iran’s oil exports thus has fallen to 1.1 million bpd on average by March 2019 and revenue loss consisted of $10 bn.9 Further, Donald Trump, in the aftermath of drone attack on Saudi oil, ordered the Treasury Department to “substantially increase” sanctions on Tehran due to possible Iran hand on Saudi oil attack.10 The outbreak of Arab Spring in 2010 and consequent crisis in West Asia have important implications for international oil markets. With the outbreak of protests in Tunisia, the price of oil (Brent) increased from US$ 74.90 to US$ 85.2 [37]. The Libya’s internal disturbances resulted in a loss of 288 mbd in 2011 [36]. Under the spiralling effects of Arab Spring, the Islamic State of Iraq and Syria (ISIS) or Islamic State, Al Nusrat (an offshoot of Al Qaeda) and other militant groups have waged war within a broader perspective of non-state threat to the energy assets and oil supply. Because of civil war and militant acts, Syria’s oil production has decreased from an average of 380,000 bpd in 2010 [38] to 164,000 bpd in 2012 and 28,000 barrels per day (bpd) in 2013 [39], and the country which exported 152,412 bpd crude oil in 2010 turned as a net importer [40]. The militants and the rebels have controlled six out of Syria’s ten oil fields, including the large Omar facility and main oil fields in Deir Az-Zor, Aleppo, Homs Governorates and Raqqa city. Al-Hasakah Governorate is still under the control of Kurds. It is estimated that by the end of 2015, the rebels and terrorist groups in Iraq and Syria have sold up to 80,000 bpd in oil black market worth several billions [41]. As a consequence, the crude price increased by 3%, i.e. $105.71 per barrel. In Iraq, the ISIS (IS) has captured at least three oil fields such as Ajeel (near Tikrit city), Kaz (Anbar province) and Hamreen, while attempting to capture Basra oil refinery. The civil war in Yemen has taken a ugly shape with Shia versus. Sunni conflicts, the rise of Houthi and involvement of external players. The country Yemen which exported 175,176 bpd crude oil in 2010, produced 140,000 bpd in November 2013, and like Syria, it turned as the net importer of crude [40]. Nevertheless, crisis in West Asia not only leads to oil and natural gas supply disruption but also damage of energy infrastructures. Since the Gulf War-II, 2003, there has been more than 80 attacks on Iraqi oil facilities and installations by the non-state actors such as militants and irredentist groups. Even during the Gulf WarII, the then President Saddam Hussain of Iraq burnt oil wells to disrupt US military operations in Iraq. The country’s sole oil export pipeline, starting from Kirkuk in Iraq to Ceyhan in Turkey, has been subjected to frequent sabotage and damages by the militants or groups. The strategic port of Basra and the oil-loading terminal at Khor al-Amaya have been the main targets of destruction. In Syria, the country’s biggest gas pipelines supplying energy to the capital Damascus and Homs province were blown up by the rebel groups. Since entire West Asia is interconnected with oil pipelines, energy trade, handling facilities and export terminals, any attack or disruption in supply effects the whole region and disruption of supply chain. Most recently, Saudi Arabia’s oil production is cut by half and its exports are hit after a swarm of drone attacked country’s oil industry, setting ablaze two oil plants—one being Abqaiq (Buqyaq) and other at Khurais, on 14 September 2019. The Abqaiq is the world’s biggest oil processing plant which can process up to seven million barrels

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of crude oil a day. The Khurais oil field produces over one million barrels crude oil a day, and it has estimated reserves of over 20 billion barrels of oil. The Houthi in Yemen, who had launched drones attacks on Saudi targets in past, has claimed responsibility of 10 drones in their coordinated attack.11 The recent attack is largely an outcome of battle between Iran-backed Houthis and Saudi-led coalition in the Yemen since 2015. The Houthis hold Yemen’s capital, Sanaa, and other territories in the Arab world’s the poorest country. Moreover, the US–Iran imbroglio has fuelled the tension among the four countries (USA, Iran, Saudi Arabia and Yemen) in a more complicated nature. Nevertheless, the strikes are the biggest on the oil infrastructures in Saudi Arabia, world’s top crude exporter, and highlighted the vulnerability of its network of fields and infrastructures such as pipelines and ports which supply 10% of the global energy market [42]. Soon after the attack, the country shut down half of its oil productions and the closures resulted in the loss of about 5 million barrels a day (about 5%) of the world’s daily crude oil production, which is half of its total production of 9.8 million barrels a day [43]. The oil prices surged by almost 20% soon after the attack. The price of Brent crude jumped by nearly 20%, while the cost of US crude jumped by 15% [44] and the fear has cropped up that the attack will jolt global energy markets in long term. The rise of price is largely due to two factors: Saudi shut down of production, and the fear of possible war of USA and Saudi Arabia in side and Iran on the other. However, the disruption of production could be overcome if the Saudis restore the Abqaiq facility back and if the tensions between the USA and Iran, or Saudi Arabia and Iran do not escalate.

3.3.1 Implications Every oil shock in West Asia has necessary impacts on India’s energy security. Significantly, during the Arab oil embargo against the USA, the crude price increased sky rise, and India, like other developing countries, which had friendly relations with the Arab states, had expected that it will be treated differently. But, the OPEC expressed its inability to adopt a dual pricing system, and thus India’s oil import bill increased to $414 million bpd in 1973 and $1350 million bpd in 1974. This amount constituted of 40% of its potential export earnings from the goods and services, and twice the amount of its existing foreign exchange reserves [45]. During the 1990– 91 Gulf crisis, India’s balance of payment was estimated at Rs. 5180 crore, and it could not import 6.25 mt of crude due to high insecurity and volatility of these two countries. Although the Soviet Union pumped 4.5 mt more oil to India to compensate the loss, yet UN sanctions on Iraq’s oil assets further created shortage of supply to India’s energy requirements. Therefore, the Indian government in 1996 increased the prices of most of the petroleum products, which was an attempt to reduce deficits in the oil pool account. On the outskirt of Gulf War-II, 2003, the NDA government imposed 15% hike in fuel prices, except kerosene [5]. With the outbreak of ISIS (IS), most of the Western oil companies halted their production in the troublesome areas of Iraq and Syria. The shares of ONGC in Iraqi

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oil fields fell to 6.7%, Oil India 6%, Reliance Oil 2% and IOC and HPCL fell 3% each. Under these circumstances, the Indian government foresees the global crude oil price rising to as high as $120 per barrel, with a potential impact on the Indian budget of at least Rs. 200 billion ($3–4 billion) and Indian crude oil basket price also rose to $111.25 per barrel in June 2014 [46]. The Indian Ministry of Petroleum and Natural Gas seriously monitored the developments in Iraq as supplies to India were largely from Basra—although a far away from IS influence and conflict zones. There was no immediate worry of supply disruption since New Delhi, before the outbreak of militancy, had already imported half of its quota from Iraq, as said by Dharmendra Pradhan, the Minister of Petroleum and Natural Gas. Practically, India had a little to worry since most of the oil wells and refiners were in Southern part of Iraq, and Syria was not a significant supplier for the Indian energy basket. However, India was much worried that the conflict would not have a spiralling effect and the Indian government had asked its oil and natural gas companies to be ready with a contingency plan in case of any possible supply disruption and evacuation of staff. In the mean time, the ministry had asked the officials to prepare for both short and mid-term plans, including diversification of the oil import basket. Here, the obvious reference was Iran. However, there have been some limitations to the Indian approach for the Iranian oil because of UN sanctions, where the buyers were not allowed to increase their imports. Meanwhile, in a bid to smoothen the switchover, the Indian government started the process of paying 30% of the $4.2 billion that Indian refiners owe Iran, which was held back because of the UN sanctions against Iran over its nuclear programmes [47]. Like Iraq, due to ISIS (IS) and civil war, many oil wells in Syria have been shut down, equipments have been looted, companies withdrawn their shares and the warehouses emptied. India has less investments in Syria, yet it has halt all its energy activities in the country [48]. The OVL has lost control of its oil investments in Deir Ezzor Governorate, where India is a party to the conglomerate.12 and which has been overrun by the rebels and militants. This is for the first time in India’s energy history that the country has lost control of its own oil assets abroad by the non-state actors. The Indian government has been constantly in pressure or influence by the US government to cut or reduce oil imports from Iran. In the wake of US withdrawal from the Joint Comprehensive Plan of Action (Iran nuclear deal or Iran deal), Washington asked New Delhi to cut its import by 4 November 2018 so as to get the US waiver. This is in congruence to the White House statement, “We will consider waivers where appropriate, but that is our expectation that the purchases of Iran crude will go to zero from every country, or sanctions will be imposed on those countries importing Iranian oil”. Accordingly, India’s oil import from Iran and the development of Chabahar port have come under scrutiny. In the ‘2 + 2 dialogue’13 between India and USA at New Delhi, the issue was discussed although Washington understands the necessity of India—Iran energy trade and development of Chabahar port, and not to penalize a great strategic partner.14 India is definitely looking for waiver from those sanctions, and it may make tough bargaining with the USA, since the proposed sanction is not UN-mandated, and India is very vital for America’s national interest and global pursuits. India may not completely follow to the US diktat, yet due to its exposure to

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the US financial system it has to lessen its reliance on Iranian crude. Indian refiners have started reducing their Iranian crude import, i.e. about half of each month (less than 12 million barrels each month). This is an attempt to score a waiver from the USA. By March 2019, because of pressure from USA and its allies, some countries Taiwan, Greece and Italy had halted import, while Iran’s largest buyers—China and India—had reduced oil and natural gas import by 39% (300 tbd) and 47% (360 tbd), respectively. Yet, till date, India is the second-largest importer oil client of Iran after China [49]. This has been in sharp contrast just before the US withdrawal from the deal in May 2018 when the bilateral energy trade between India and Iran was 563 tbd [50], and this decline is largely an outcome of the persistent effort of the Trump administration to bring Iran’s oil exports to “zero”.

3.3.2 Security Arrangements The security and geopolitical considerations between India and West Asia are generally combined with economic engagements. And thus, India has shown pragmatism in its relationship with the different power centres and stakeholders of the region. Given the relationship, India has entered into an extraordinary defence agreement with Qatar in 2008, committing to protect its assets and interests from external threats, established security understanding and strong links with Bahrain. The Saudi Arabia, Iran and UAE have signed extradition treaty and extradited terror suspects to India [51]. One of the main objectives of Narendra Modi’s recent visit to UAE and Saudi Arabia has been identified with counterterrorism. Since both UAE and Saudi Arabia are historical allies of Pakistan, India’s joint statements with the UAE and Saudi Arabia revealed implicit reference to Pakistan for its duality on terrorism. The Saudi intelligence helped India in identifying the Pakistani terrorists who carried out an attack on Indian Air Force base in Pathankot in January 2016. Saudi Arabia expressed that its officials have become “more responsive” to New Delhi’s complaints on Saudibased funding for extremist Islamic mosques and seminaries inside India. However, until the visit of Narendra Modi to Saudi Arabia (2016), Riyadh had never accepted such a strong message of joint cooperation on counterterrorism [52]. In the defence and security space, India and UAE have agreed to work together against terrorism, counter radicalization, hold a half-yearly meeting between their respective national security advisors, manufacture of arms in India and strengthening of defence relationship through regular military exercises. Underpinning this was an acceptance that, “the need for a close strategic partnership between UAE and India has never been stronger or more urgent, and prospects are more rewarding than in these uncertain times”. New Delhi also meticulously looks at the UAE’s relationship with Pakistan and how Pakistani-backed terrorists often found physical and financial haven in Dubai. Crucially, Abu Dhabi responded that these issues were not off the table. Further, New Delhi and Abu Dhabi have agreed for regular exchanges of religious scholars and intellectuals so as to check radicalism [53].

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Like UAE and Saudi Arabia, Israel is a potential country to reckon. Israel is India’s third-largest supplier of military equipment [54], and both the countries are cooperating each other for security and political reasons. Israel has reciprocated India’s hand for friendship due to changing geopolitical and global scenarios, “When I turn my head to the right, India is the first democracy that I see”, said Benjamin Netanyahu in his 2018 visit to New Delhi. For New Delhi, a deep relationship with Israel has become easier due its normalization of relationship with Saudi Arabia and other West Asian countries. Welcoming his counterpart at Tel Aviv, Israeli Prime Minister Benjamin Netanyahu said, “We have been waiting for you for a long time, almost 70 years, in fact” [55]. Within the Indian strategic community, Israel is increasingly regarded, both as a strategic defence partner and a model of counterterrorism” [56]. India–Israel relations are a journey where India has come a long way from the days in the 1970s, when Saudi Arabia threatened to cut off oil supplies if India did not close down the Israeli Consulate in Mumbai. However, the then Prime Minister Indira Gandhi rejected the Saudi demand [57]. Relationship with Israel in contemporary period largely emanates from fast–growing Indo–US relationship which can be partly attributed to Jewish lobby in Washington. Israel has stood with India whenever needed and whatever required, which could be well explained through the Kargil war and post-Pokhran-II sanctions by the USA [58]. India has faith in the assumption that better ties with the USA and Israel are crucial for its virtuous relations with the West Asian countries, since many countries from this region are close allies of the USA and Europe [59]. As India has been cooperating with the international community in fighting against piracy, security of maritime trade and energy supply, Oman is pivotal for India on these counts. In the recent visit of Narendra Modi to Oman, both the countries finalized base facilities which will be provided by Oman to India in its Duqm port, a move that will bolster Indian efforts to increase surveillance in the Arabian Sea and Western Indian Ocean region, military use and logistical support [22]. Apart from Duqm, India is looking forward to use two other ports in Oman: such as Salalah, the largest port of Oman, which is in the Western part of the country near Yemen and strategically located at the crossroads of trade between Asia and Europe; and Sohar, a deep sea port that has a free zone, is Oman’s the fastest-growing port [60]. Apart from the port facilities, India has been invited to invest in the Omanian Ras Markaz strategic oil reserve, which is close to its Duqm port. Congruence to this, India has also invested in a fertilizer plant in Oman to feat gas resources, and the port will be used for the shipment of chemical fertilizers, produced from this plant [29]. In the context of ongoing security issues in the region, Qatar wants stronger political ties with one of its major customers in an increasingly competitive international gas market, and stepped up for military cooperation with New Delhi for energy security in the West Asian region [61].

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3.4 Balancing the Adversaries India is hesitant to get embroiled in the internal conflicts of West Asia. New Delhi’s West Asia policy, in fact, is a bundle of country-specific relations, and the goal is to ensure that there is no entanglement with other countries while dealing with the one, and thus New Delhi’s stand is meant for keeping the region at arm’s length. According to Anil Wadwha, Secretary and Senior Diplomat in charge of West Asia, Ministry of External Affairs, Government of India, “We would not wish to create parallel mechanisms that will affect our bilateral relations. We need to be insightful to the perceptions of India’s own religious and ethnic mix and thus should not be misconstrued as being partisan or sectarian in foreign policy pursuits” [62]. In the last years, India has understood the needs of West Asia like never before. The biggest takeaway of this is “de-hyphenated” relations. “Today, you do business with Saudi sheikhs as well as with Israel, US and Iran, and India’s relationship is not dependent on the mutual calculations in the region”, says a Senior Bureaucrat Christof Ruhl, former Chief Economist at British Petroleum and current Global Head of Research at Abu Dhabi Investment Authority. This as a new takeaway, where the relationships are graduating and the mere buyer–seller relationship has been converted to a partnership. The Narendra Modi government in recent times has tried for a balancing approach towards Palestine and Israel and visited both Palestine and Israel in the year 2018. Significantly, he is the first prime minister of India to visit Israel and Palestine and his government’s approach is to consolidate its relations with these two governments through a non-zero sum game rhetoric, which can be best explained that the increasing relationship with Israel is not at the cost of Palestine. The recent visit to India by Mahmoud Abbas, the President of the Palestinian National Authority, has been an ample demonstration of this rhetoric [55]. Being the first-ever prime ministerial visit to Palestine, Modi reaffirmed India’s support for the Palestinian people and development of Palestine [63]. Expressing appreciation for his “great guest”, the Palestinian president conferred the Grand Collar of the State of Palestine on Mr Narendra Modi. The Grand Collar is Palestine’s highest honour given to top foreign dignitaries [22]. Reacting to Donald Trump’s recognization of Jerusalem as Israel’s capital and White House plan for shifting the US embassy from Tel Aviv to Jerusalem, New Delhi has made its stand clear that India’s relation with Palestine is independent, not determined by the third country [64]. Historically, India has supported the Palestinian cause and sympathetic or supportive to East Jerusalem as being the capital of an independent Palestinian state. However, during the meeting with the Palestinian President Mahmoud Abbas, Prime Minister Narendra Modi spoke for an independent Palestine and avoided the wordings of Palestine claim over East Jerusalem in a joint communiqué at New Delhi in 2017. In the recent geopolitical scenario, India deliberately skips the Jerusalem issue while talking to Palestine since the USA has declared controversial Jerusalem as the capital of Israel and relocation of its embassy there, and India has made its stand clear to oppose US move to give Jerusalem the

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status of UN mandate. Indeed, India has a moral obligation to stand by its own principled position of supporting a two-state solution to the Israel–Palestinian issue, which includes security for Israel and viable Palestine state for the Palestinians [57]. India’s Israel–Palestine strategic balance approach largely accrued from its quest for energy resources in this region. Over the past few years, New Delhi has shown interest in investing in Israel’s energy sector. However, issues have cropped up. In 2012, more than 15 trillion cubic feet of natural gas was discovered in the Israeli oil field called Leviathan. This discovery garnered interest within the Indian energy experts and policymakers. However, the Ministry of External Affairs did not find it well to do business with the Israeli counterparts, although the Indian companies have stepped up for investment. Reasons behind these apprehensions in past, however, stemmed from Arab allies who have been not in favour of India–Israel energy trade and investment. Earlier, the Kuwait Petroleum Corporation (KPC) had cancelled a personnel training contract with Indian Oil Corporation (IOC) when it came to know IOC’s close ties with the Israeli oil companies. In November 2013, the Indian government halted the invitations sent to Israeli companies who were expected to participate at the Petrotech Energy Conference in New Delhi. Without such a step, the conference could have been turned into a “diplomatic disaster” since there were a large number of West Asian companies and diplomats in the conference [65]. Nevertheless, the ties between the two countries are expected to rise in the future and energy companies from India will find their ways in doing business with Israel. However, much depends on normalization of Arab–Israel relations and robust India– Israel partnership, alongside confidence of other West Asian countries. With regard to Syria, New Delhi maintained close links with the Syrian Ba’ath Party government which has been in power since the 1960s. As the civil war intensified in the country in the wake of Arab Spring in 2012–2013, New Delhi diplomatically biased with Moscow against any Western military intervention. During this period, Assad government diplomats made trips to India to try and garner support not just from the Indian government but from the entire BRICS (Brazil–Russia–India– China–South Africa) group of nations. Damascus looked for New Delhi’s support to stall any incoming military assistance coming to fractured opposition forum known as the Syrian National Coalition (SNC). Dr Bouthaina Shaaban, Political Advisor to Assad on her visit to New Delhi said that India was “an important country for the political process on Syria” [17]. Moreover, in the wake of US–Iraq conflict and war, Saddam Hussain sold oil to India at lower prices and with preferential conditions. During the Gulf War-II (2003), India avoided joining US group because of domestic pressures and non-interference policies. Moreover, in India, there was a political outcry when New Delhi allowed US military aircraft (transport planes) to refuel at Bombay’s international airport en route from the Pacific to the Persian Gulf [66]. On the US–Iran nuclear tangle although there was no official confirmation, yet USA had influenced and pressurized New Delhi to vote against Tehran on its nuclear programme in the United Nations forum and reduce its oil and natural gas imports from Iran. This change of attitude could be largely attributed due to the fast-growing relationship between New Delhi and Washington and the then ongoing negotiations between the two countries for nuclear deal [67]. This can be well illustrated that the

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then Oil and Natural Gas Minister of India Mani Shankar Aiyar, who was strongly advocating for Iranian energy and Iran–Pakistan–India (IPI) gas pipeline was reshuffled with Murli Deora, who was a pro-American and inducted with a long-standing Indo–US Parliamentary Forum (IUPF). He was also critical to IPI gas pipeline [68]. It is a recognized fact that since the inception of IPI pipeline, the USA is against the proposal since it will increase revenue generation of economically strained Iran, thwart international isolation and increase Iranian role in the international energy market and regional geopolitics. Rather, the USA is supportive to Turkmenistan– Afghanistan–Pakistan–India (TAPI) pipeline so as to reduce Indian dependence on Iranian hydrocarbon [67]. In the context of US–Iran deal, India has supported for the full implementation of Joint Comprehensive Plan of Action, to which US President Donald Trump had serious objections [69]. The withdrawal of Trump administration from the deal is a setback to New Delhi’s expectations for the renewal of energy ties with Iran. To garner India’s support for Iranian energy market, President Rouhani’s visited India recently, which indicated for better understanding of each other’s requirements and geostrategic support [70]. Till date, although USA pressurizing India for total cut of energy ties with, India has just reduced the import and maintained the balance between USA and Iran. Nonetheless, the Indo–US relations on the West Asian issues are based on the assumption that stronger relation with USA is vital for India’s energy quest in West Asia and its overall relationship with the countries in the region. Whatever the odds might be, Tehran occupies an important position in India’s historical relations and historic decisions, strategic thinkings and security perspectives. First, Iran supplies about 6% of India’s oil imports [71]. Second, Iran borders the Strait of Hormuz through which a fifth of the world’s seaborne oil vessels pass. Third, Iran is poised to become India’s “gateway” to Central Asia, Europe and Russia. Fourth, development of strategic ports at Chabahar and Bandar Abbas will enhance India’s territorial defence and maritime security of the Arabian Sea and Indian Ocean. The Indian government will also construct a rail network [72] in Iran that will connect Chabahar port to the city of Zahedan, which is located close to the border of Pakistan and Afghanistan. Fifth, the International North–South Transport Corridor (INSTC) will promote trade between India, Russia and Central Asian countries. Sixth, Iran is a valuable ally in the fight against the Taliban and stability of West Asia. Both are concerned for stability and security of Afghanistan since disturbances in this country will have a spiralling effect for the whole West Asia and South Asia. Seventh, Iran is a strategic partner to curtail Pakistan and China’s influence in West Asia. Eighth, historically, Iran has taken a very pro-India position on Kashmir issue, compared to the rest of West Asian countries. In 1994, Iran blocked a consensus on a resolution on Kashmir, pushed by the Organization of Islamic Cooperation (OIC) in the U.N. Commission on Human Rights, which effectively bailed out India. Moreover, when there was so much of hue and cry over Babri Masjid demolition issue, Iran came forward to support Indian government, “Muslims in India are safe”. Finally, Iran is an emerging regional power with wide-ranging influence in West Asia that could contribute to regional stability in the region. Looking into these strategic and energy interests, the two countries have agreed to develop their energy relationship beyond

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the traditional buyer–seller relationship to energy security and strategic partnership [73]. Since the region has increasingly become unstable on account of regional competition, political instabilities, civil wars and the rise of Islamic State, the logic of careful balancing is applied in the Indian foreign policy discourse. The geopolitical and religious conflicts and differences between Iran and Saudi Arabia have intensified in recent years, thus casting adverse impacts on the West Asian development [74]. At present, Saudi Arabia and Iran are directly involved in two civil wars in West Asia. In Syria, the Saudis and USA are backing anti-government Islamist groups or rebels whereas the Iranians are staunchly behind the regime of President Bashar al-Assad. In Yemen, Riyadh and its Gulf allies are backing the government of Abdrabbuh Mansur Hadi, while Iran has thrown its weight behind the Shia Houthi rebels [59]. Further, Washington has removed restrictions on weapons supplies to Saudi Arabia for use in Yemen and has approved lethal US bombings in Yemen, if required [9]. Further, while Qatar was sanctioned by Saudi Arabia and its allies on alleged terrorism, Iran and Turkey came for its rescue. When India cut its energy import significantly from Iran due to UN sanctions, the Saudis came forward to compensate the loss. The recent visit of Narendra Modi to Saudi Arabia and Iran is clearly an indicative of India’s balancing tactics in dealing regional powers and adversaries—Iran and Saudi Arabia. But the US withdrawal from the US–Iran deal, US sanctions, drone attacks on Saudi oil installations, and India’s reduction of energy imports from Iran, casts shadow over New Delhi–Teheran relationship vis-à-vis Riyadh and Washington. In West Asia, India is hardly interpreted as a hostile power by the either blocs of Iran and Saudi Arabia. Saudis well know that New Delhi does not have any ambitious plan to control West Asian region and no strategy for any global alliance that challenges the role of Saudi Arabian in the region. New Delhi, in fact, is in favour of deepening its partnership with all the countries in the region and not in favour of external interventions and power politics. Accordingly, India had opposed war in Libya in 2011, and called for a political solution to the Syrian crisis, which has been in sharp contrast to some of the powerful countries demand for Assad’s ouster. India adheres to non-military solution and speaks for an inclusive political dialogue and comprehensive political solution, which can best serve the interest of the Syrians [75]. In 2016, India abstained from a Canadian-led resolution of “outrage” on Syrian crisis in the United Nations General Assembly in line with its traditional approach that it does not mix humanitarian issues with political issues [76]. This is clearly highlighted in the testimony of the then Indian ambassador to Damascus, V. P. Haran, who ex-post justified his support for Bashar al-Assad’s regime, citing the involvement of jihadi groups like Al-Qaeda, IS and other terror groups [77]. Contrary to this, on Yemen crisis, India maintained distance from Iran, and favourably hosted the Foreign Minister of the Saudi-backed Hadi government in Yemen, Abdulmalik Abduljalil Al Mekhlafi. But India’s recent interaction with the Yemeni foreign minister hardly has any political relevance since the sponsors and supporters of the Hadi government, such as Saudi Arabia and the UAE, are pursuing a political settlement that will exclude Hadi and bring former President Ali Abdullah Saleh back into the national mainstream [9]. Nevertheless, a well-known Scholar and

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Researcher at The Begin-Sadat Centre for Strategic Studies at Bar-Ilan University, Gil Feiler, well explained India’s role in West Asia: India is Striving for an ever deepening diplomatic and trade relationship with Iran, Israel and the various Arab countries. New Delhi is completely unwilling to accept the objections of any of these countries in its relations with the others. Unlike past policies, there is pragmatism in relations, and an India-centric foreign policy in the region has been evolved [78].

An Assessment The West Asia is not free from geopolitical rivalry, external involvement, interference and insecurity challenges. Oil infrastructure and supply have been disturbed many times, although India has managed well in some of the critical junctures. For example, during UN sanctions against Iran for its nuclear programme, India managed well to get more oil and natural gas from Iraq and Saudi Arabia. Under the ongoing US sanctions on Iran, Russia, Saudi Arabia and Iraq, along with other West Asian countries, have agreed to increase oil production by up to 1 million barrels a day starting in August, so as to fill the shortage on the global community [79]. India has also followed the policy of diversification of its suppliers and regions so as to reduce its overdependence on the West Asia’s energy resources. In its foreign policy, the country has always followed a balancing role for a larger energy interest. During the Cold War years, India maintained close economic cooperation with both Saudi Arabia and Iran, the rival poles in the regional geopolitics. Even when New Delhi warmed up to Israel in the 1990s as part of the country’s efforts to diversify its diplomatic engagement in the post-Soviet world, it was also careful not to jeopardize its traditional relation with the Islamic countries in the region. The bi-directional approach (India–Iran, India–Saudi Arabia) in Cold War period has been expanded to a tri-directional foreign policy to accommodate the three key pillars—Saudi Arabia, Iran and Israel in the region [59]. Prime Minister Narendra Modi has dehyphenated relations with the regional adversaries. For example, in his visit to Israel, Modi avoided visiting Ramallah, likewise in Palestine he skipped the controversial Jerusalem issue [80]. Energy security is the major factor which drives India’s relation with West Asia. But in many instances, India’s balanced approach with all the West Asian countries raised criticism and concerns from within the country and various stakeholders of the world. The security scenario in the region, issue of terrorism, the US role and geopolitical isssues, have always been a concern for India. Whether it is Israel, Iran or Saudi Arabia, India has always tried to balance its relations with everyone to reap the benefits of cooperation. In the foreseeable future, India can act in the ways, as analysed above, to take its West Asian strategy forward to ensure its energy security and so as to meet the demands of its economy. President Trump’s possible military action against Iran is a concern for all the energy stakeholders in the world and it will definitely destabilize the whole West Asia [81]. There has been changes in Indian foreign policy towards Westa Asia. Although the Indian policymakers have focused on domestic challenges and priorities, they nonetheless seem determined to raise India’s profile in the West Asian energy market, apart from energy security. Stability

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of the West Asia is important for India’s larger interest, and the former Foreign Secretary of India S. Jaishankar has reaffirmed India’s commitment for “shouldering of greater responsibility and engaging the world with a greater confidence and assurance” [82]. A step ahead to this, Prime Minister Narendra Modi in 2015 echoed West Asia as a “valued strategic partner” and asked Indian diplomats abroad to make India’s position itself with a “leading role” [83]. However, in the context of a multiple and complicated calculus in West Asia, India has to set a meticulous strategy and approaches so as to ensure that its energy interest is best secured in West Asia under the changing geopolitical dynamics. End Notes 1.

The 60% of the company is hold by ADNOC and remaining 30% is awarded to other international oil companies, including 10% of the Indian consortium. 2. Along with Qatar, Russia, Australia and the US have long-term contracts with India on LNG supply. India’s total annual LNG consumption is 18 million tons, in, Petleva, Vitaly and Toporkov, Arthur, 2019. ‘Interview of M/o Petroleum & Natural Gas to Vedomosti, Embassy of India, Moscow, Russia,’ September 4, https://indianembassy-moscow.gov.in/press-releases-04-09-19.php. 3. South Pars or North Dome field is a natural gas condensate field which is one of the largest natural gas fields in the world. 4. The former Iraqi Foreign Minister Hoshyar Zebari expressed this during a joint press conference with his Indian counterpart Salman Khurshid who arrived Baghdad on 19 June 2013 on an official visit, in, ‘Iraq assures India over oil supplies’, The Pioneer newspaper (India), https://www.dailypioneer.com/topstories/iraq-assures-india-over-oil-supplies.html. 5. This was possible largely due to intensive engagement of India’s former External Affairs Minister, Mr Salman Khurshid and former Minister of Petroleum and Natural Gas, Mr Veerappa Moily, with the Iraqi counterparts. 6. In 2014, the IOC imported 270,000 bpd crude for refining in India. 7. The Joint Comprehensive Plan of Action, well known as the Iran nuclear deal or Iran deal, is an agreement on the Iranian nuclear program which was signed in Vienna on July 14, 2015, between Iran and the P5 + 1 together with the EU, led to the waive of UN sanctions against Iran. Six charts that show how hard US sanctions have hit Iran, BBC News, 2nd May 2019, https://www.bbc. com/news/world-middle-east-48119109. 8. ‘2 + 2 Dialogue COMCASA signed; Iran Oil Import, H1B Visa Discussed,’ the quint, https://www.thequint.com/news/india/two-plus-two-dia logue-sushma-swaraj-nirmala-sitharaman. 9. ‘Six charts that show how hard US sanctions have hit Iran’, BBC News, May 2, 2019, https://www.bbc.com/news/world-middle-east-48119109 10. Oil falls 2% after Trump orders increased sanctions on Iran instead of military action, CNBC, September 18, 2019, https://www.cnbc.com/2019/09/18/oil-mar kets-saudi-arabia-oil-production-in-focus.html. ‘Six charts that show how hard US sanctions have hit Iran’, BBC News, May 2, 2019, https://www.bbc.com/ news/world-middle-east-48119109.

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11. The Houthi warned that the attacks would only get worse if the Saudi war against them continues and the only option for the Saudi government is to stop attacking them. This claim was aired by Houthi’s Al-Masirah satellite news channel on 14 September 2019, in, ‘Houthi drones hit world’s largest oil facility in Saudi’, Sunday Times, September 15, 2019, 14. 12. The field in question is a part of Himalaya Energy Syria B.V, a joint venture between ONGC Nile Ganga BV, a wholly owned subsidiary of OVL and Fulin Investments Sarl, a subsidiary of China National Petroleum Company International (CNPCI), holding 50% shares each. The fields are operated by Al Furat Petroleum Company (AFPC), jointly owned by Syrian Petroleum Company (50%), the National Oil Company of Syria, Shell Syria Petroleum Development Co. (31.25%) and HESBV (18.75%). 13. US Secretary of State Mike Pompeo and Jim Mattis had talks with the External Affairs Minister Sushma Swaraj and Defence Minister NIrmala Sitharaman at New Delhi to discuss issues of strategic and security interest between India and the United States, in September 2018. 14. Statement of US Secretary of State Mike Pompeo to the journalists who were travelling with him to India, 7 September 2018, in, ‘Purchase of Russian missiles and Crude Oil Import from Iran: What was Discussed’, https://www.thequint. com/news/india/two-plus-two-dialogue-sushma-swaraj-nirmala-sitharaman.

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53. Chaudhuri, Pramit Pal. 2017. ‘Think West to Go West: Origins and Implications of India’s West Asia Policy Under Modi (Part I)’, Middle East Institute, September 26, http://www.mei. edu/content/map/india-s-west-asia-policy-under-modi-part-one. 54. Gupta, Ranjit. 2017. India’s Relations with West Asia: A New Era Dawns, Middle East Institute, March 7, http://www.mei.edu/content/map/india-s-relations-west-asia. 55. Jaishankar, Dhruva and Shruti Godbole. 2017. Even as India attempts to ‘Act East’, It is ‘Thinking West’. BROOKINGS, July 6, https://www.brookings.edu/opinions/even-as-india-att empts-to-act-east-it-is-thinking-west/. 56. Alam, Anwar 2017. India’s Strategic Vision about West Asia and its Limitations. Middle East Institute, May 21, http://www.mei.edu/content/map/india-s-strategic-vision-about-west-asiaand-its-limitations. 57. Parthasarathy, G. 2017. Turn Focus on West Asia. The Tribune, March 9, https://www.tribun eindia.com/news/comment/turn-focus-on-west-asia/374559.html. 58. Sarkar, Jayita. 2014. India and Israel’s Secret Love Affair. The National Interest, December 10. http://nationalinterest.org/blog/the-buzz/india-israels-secret-love-affair-11831. 59. Johny, Stanly. 2016. Such a long Silence on Yemen. The Hindu, August 22. http://www.the hindu.com/opinion/lead/Such-a-long-silence-on-Yemen/article14582324.ece. 60. Joshi, Manoj. 2018. Success of Modi’s ‘Act West’ Policy Opens Doors to Gulf Potential. The Quint, February 14. https://www.thequint.com/voices/opinion/opinion-narendra-modigulf-middle-east-act-west-policy-oil-sea-ports. 61. Bagchi, Indrani. 2015. Qatar has Big Investment Plans for India. Times of India, March 25. http://timesofindia.indiatimes.com/india/Qatar-has-big-investment-plans. 62. Chaudhuri, Pramit Pal. 2017. Think West to Go West: Origins and Implications of India’s West Asia Policy Under Modi (Part I), Middle East Institute, September 26. http://www.mei.edu/ content/map/india-s-west-asia-policy-under-modi-part-one. 63. Gulf, West Asia Key Priority for India: Modi. Business World, February 8, 2018. http://www. businessworld.in/article/Gulf-West-Asia-key-priority-for-India-Modi/08-02-2018-140125/. 64. Razdan, Nidhi. 2017. Our Palestine Position Independent: India On US’ Jerusalem Announcement. NDTV, December 7. https://www.ndtv.com/india-news/our-stand-independent-indiaafter-trump-announcement-on-jerusalem-1784618. 65. Samanta, Pranab Dhal. 2013. MEA ‘Freezes’ Invites to Taiwan and Israel for Oil Conferences. The Indian Express, November 14. 66. Crossette, Barbara. (1991). India in an Uproar Over Refueling of U.S. Aircraft. New York Times. https://www.nytimes.com/1991/01/30/world/india-in-an-uproar-over-refuelingof-us-aircraft.html. Accessed on March 28, 2018. 67. Pradhan, S. K. 2008. Iranian Nuclear Dilemma and the United States. Asian Studies 1–14, July–December, vol. xxvi, no. 2. 68. WikiLeaks Cable: ‘Pro-US’ Cabinet reshuffle’. NDTV, March 15, 2011. https://www.ndtv.com/ india-news/wikileaks-cable-pro-us-cabinet-reshuffle-450134, Accessed on 29 March 2018. 69. Connectivity Central to Iran-India Future Ties. Financial Tribune, February 25, 2018. https://financialtribune.com/articles/economy-domestic-economy/82456/connectivitycentral-to-iran-india-future-ties. 70. Connectivity Central to Iran–India Future Ties. The Financial Tribune, February 25, 2018. https://financialtribune.com/articles/economy-domestic-economy/82456/connectivitycentral-to-iran-india-future-ties. 71. Annual Report: 2014–2015 58. Government of India, Ministry of External Affairs. http:// www.mea.gov.in/Uploads/PublicationDocs/26525_26525_External_Affairs_English_AR_ 2015-16_Final_compressed.pdf. 72. An MoU has been signed by Indian Railways on services and financing of $1.6 billion for Chabahar-Zahedan Railway line, in Jaggu Dan Ratnoo. July 2017. India–Iran Bilateral Relations and Its Implications on India’s West Asia Policy. International Journal of Academic Research and Development, 2 (4): 653–654. 73. Connectivity Central to Iran-India Future Ties. The Financial Tribune, February 25, 2018. https://financialtribune.com/articles/economy-domestic-economy/82456/connectivitycentral-to-iran-india-future-ties.

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74. Gurjar, Sankalp. July 19, 2017. India’s Balancing Act in West Asia. The Dialogue. http://www. thedialogue.co/indias-balancing-act-west-asia/. 75. The Hindu, September 4, 2013. 76. The Times of India, December 10, 2016. 77. Gulf Countries Played a Role in the Syrian Uprising. Fountain Ink Series. http://series.founta inink.in/gulf-countries-role-uprising/; and India, Iran, and Greater West Asia’, May 19, 2016. Gateway House: Indian Council on Global Relations, Gateway House. https://www.gatewa yhouse.in/india-iran-and-greater-west-asia/. 78. Feiler, Gil. 2012. India’s Economic Relations with Israel and the Arabs. In Mideast Security and Policy Studies, No. 96, 8. The Begin-Sadat Center for Strategic Studies, Bar-Ilan University, July 2012. http://besacenter.org/wp-content/uploads/2012/07/MSPS96-Indias. 79. Meredith, Sam. US Sanctions on Iran are Set to Keep Oil Prices Elevated, Analysts Say. CNBC. https://www.cnbc.com/2018/08/06/us-sanctions-on-iran-could-push-oil-prices-above90-a-barrel-by-year-.html. 80. Kaura, Vinay. 2018. India’s West Asia Policy Rooted in Diplomatic Pragmatism, Delicate Balancing act Between Israeli friends and Palestinian allies. FIRSTPOST, February 5. https:// www.firstpost.com/india/indias-west-asia-policy-rooted-in-diplomatic-pragmatism-delicatebalancing-act-between-israel-friends-and-palestinian-allies-4336287.html. MEA Joint Secretary B. Bala Bhaskar. 2018. We have De-Hyphenated Our Relations. India’s Deepening Engagement with West Asia, India Strategic, February 2018. http://www.indiastrategic.in/ 2018/02/20/indias-deepening-engagement-with-west-asia/. 81. Ahmad, Talmiz. 2017. Turmoil and Terror in West Asia-Challenges for India, Synergia Foundation: Impact and Beyond Boundaries, June 10. https://www.synergiafoundation.in/event/tur moil-and-terror-west-asia-%E2%80%93-challenges-india. 82. India’s Relations with West Asia: What Patterns and What Future. Middle East Institute, March 7, 2017. http://www.mei.edu/content/map/india-and-west-asia. 83. India’s Relations with West Asia: What Patterns and What Future. March 7, 2017. http://www. mei.edu/content/map/india-and-west-asia.

Chapter 4

Central Asia: Geopolitics and “New Great Game”

This chapter covers the historicity of India–Central Asia relationship, energy trade since 1991, India’s “Connect Central Asia” policy, “Great Game” and “New Great Game” rhetoric, and how Afghanistan and Iran will be a conduit links to the Central Asian energy market. The historicity of relations is well explained with the past migration of population, Islamic invasion of India, silk route and trade linkages. The energy trade is explained with the existing oil and natural gas potentials in Central Asia and Indian investment in oil and natural gas sectors there. Indian foreign policy intends to analyse India’s overall relations with Central Asia, with a specific focus on the energy sector. The “Great Game”, largely in past, played by the different players with a varied geopolitical interests. In the “New Great Game”, India’s role is much expected by itself and other players in the region. In past, British India and presently independent India has taken a keen interest in the region for its energy needs, apart from its geopolitical interests. However, the present-day Chinese economic competitions have created the situations where the Indian investors find it tough for better access to the Central Asian energy market. Apart from these aspects, the chapter attempts to analyse how India’s improved relationship with Afghanistan and Iran could contribute for better trade and investment in the Central Asian energy market.

4.1 Historicity According to Robert D. Kaplan, a foreign affairs expert, “the history of India is the history of invasions”, and thus politically, it can be best explained through why the Central Asian region seen more as the source of threat than of an opportunity— the Sakas1 in second Century BC, the troops of Genghis Khan (Mongols) in 1221 AD, Timur (Mongols) in 1398 and Babur (Mughal) in 1526. Economically, the silk road or silk route, flourished primarily from 100th CE to 1500th CE, developed the continental route from Europe to China that stretched to the Indian subcontinent and © Springer Nature Singapore Pte Ltd. 2020 S. K. Pradhan, India’s Quest for Energy Through Oil and Natural Gas, https://doi.org/10.1007/978-981-15-5220-5_4

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the Indian Ocean. Since the silk road gradually proved risky, longer in duration and expensive in transportation costs, the trade volume decreased, and by 800 CE, the traders started to travel by safer sea routes. However, a final period of heavy use of this route happened during the thirteenth and fourteenth centuries when the Mongols ruled Central Asia and China and their influence spread to the Indian subcontinent.2 Culturally, India’s Buddhist religion, music, songs, dance and literature spread to the region and their Islamic culture spread to the Indian subcontinent. During these periods, the silk road proved a viable route, and present-day Afghanistan turned a conduit pipe for contact and cooperation between India and Central Asia. In short, before and after the invasions, the presence of India in the Central Asian region has been well marked with ancient civilizational characteristics and trade. After India’s independence, the political contacts expanded with frequent exchange of visits by India and Soviet Union leaders. The visit by Pandit Jawaharlal Nehru, the former prime minister of India, to Almaty, Tashkent and Ashgabat in 1955 brought the region closer to the Indian political spectrum. Till 1991 when Central Asia was a part of the Soviet Union, the relations were well marked with India–Soviet Union relations. But the bilateral relations suffered considerable neglect in the wake of Soviet disintegration in 1991 [1]. Nevertheless, India’s foreign policy approach towards the Central Asian countries in the initial years of 1990s was generally less consistent and less joined-up. According to strategic analyst C. Raja Mohan, “India’s struggle to meet the challenges of its economy, reconstruction of relations with super powers after the Cold War, and reconstituting of the ties with Central Asia in recent past was not high on New Delhi’s foreign policy agenda” [2]. Nevertheless, the contemporary foreign policy approaches of “neighbourhood first”, “extended neighbourhood” and “connect Central Asia” have well augmented the importance of Central Asia in the Indian foreign policy discourse because of the region’s huge natural resources and geostrategic location that connects South Asia, West Asia, Europe (through Russia), Caucasus, Russia, China and Caspian Sea.

4.2 Energy Potentials, Trade and Investment Before 1991, the Indian officials were less comfortable in dealing the Central Asian region because of Soviet stronghold, and just after the independence of these five countries (Kazakhstan, Turkmenistan, Uzbekistan, Kyrgyzstan, Tajikistan) an authoritarian tendency developed in this region, largely “backed” by Russia republic. But, with the growing presence of external powers in this region and rapid changes in geopolitics, this region has opened opportunities for New Delhi to look this region with more dynamism. The September 11 attack on the USA added new dimensions to the regional calculus in the region in the form of fighting insurgency and terrorism and ensuring global security through a regional security structure. India’s focus towards the Central Asian region is largely guided by various factors of energy interest. First, proven and unexplored hydrocarbon resources, along with uranium and other precious resources. Second, Drug trafficking and small arms trade across

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this region and the far-reaching impact on India’s security scenario. Third, Central Asia is a “land-bridge” between Asia, Europe and the Caspian Sea. Fourth, Central Asia’s cooperation for India’s regional and global expectations. Fifth, Ensure India’s national interest in the region by playing a meticulous role, without failing to power politics—as played by USSR or Russia and the USA. India is vigorously looking for the Central Asian energy resources through sector-specific and strategic engagements. India has signed strategic partnership agreements with Kazakhstan (2009), Uzbekistan (2011), Afghanistan (2011) and Tajikistan (2012). It also has a very longstanding “special and privileged” partnership with Russia, and in 2015, New Delhi elevated its relations with Mongolia to the level of “comprehensive partnership” [3]. Geographically, Mongolia is lying between China and Russia and connected to Central Asia through Kazakhstan. In parallel, India is looking for a free trade agreement with the Eurasian Economic Union (EAEU),3 and establishment of a special joint group-consisting members of EAEU and India for feasibility study, research and exploration of natural resources. All the Central Asian countries are well-endowed with the potential mineral resources. Kazakhstan has the highest reserves of oil, and its production is the highest in the region and significantly contributes 2% of the total production in the world (Table 4.1). In the context of natural gas, Turkmenistan has the highest reserves and production in comparison with all other countries in the region that constitutes 9.9 and 1.6% of the global share of natural gas reserves and production respectively (Table 4.2). Its reserve of 9.9% implies that the country has a huge potential to meet global needs in future. Both Kazakhstan and Turkmenistan are prominent countries in the world in terms of large depositories and producers of hydrocarbon resources; and after Russia, Kazakhstan is the second largest producer of oil and natural gas in the Commonwealth of Independent States (CIS). According to the US Energy Information Administration (EIA), Kazakhstan could be one of the top five oil-producing countries in the world Table 4.1 Total proved oil reserves and production of major countries by the end of 2018 Oil reservesa

Productionb

Country

Thousand million Global share (%) Thousands of Global share (%) barrels barrels per day (tmb)/thousand (tbd)/million tonnes million tonnes

Kazakhstan

30.0/3.9

1.7

1927/91.2

2.0

Turkmenistan 0.6/0.1

b

222/10.6

0.2

Uzbekistan

b

64/2.9

0.1

a Reserves

0.6/0.1

include gas condensate and natural gas liquids (NGLs) as well as the crude oil crude oil, shale oil, oil sands and NGLs (the liquid content of natural gas where this is recovered separately). Excludes liquid fuels from other sources such as biomass and derivatives of coal and natural gas c Less than 0.05% Source BP Statistical Review of World Energy, June 2019, 68 edition, pp. 14, 16, 17 b Includes

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Table 4.2 Total proved natural gas reserves and production of major countries in Central Asia by the end of 2018 Natural gas reservesa

Productionb

Country

Trillion cubic Global share (%) Billion cubic metres Global share (%) metres (tcm)/trillion (bcm)/million cubic feet tonnes oil equivalent

Kazakhstan

1.0/35.0

0.5

24.4/21.0

0.6

Turkmenistan 19.5/688.1

9.9

61.5/52.9

1.6

Uzbekistan

0.6

56.6/48.7

1.5

1.2/42.7

a Those

quantities that geological and engineering information indicates with reasonable certainty can be recovered in future from known reservoirs under existing economic and operation conditions b Excludes gas flared or recycled. Includes natural gas produced for gas-to-liquids transformation Source BP Statistical Review of World Energy, June 2019, 68th edition, pp. 30, 32, and 33

next decade, and specifically to mention, its South Yolotan natural gas field is the second largest gas field in the world [1]. Likewise, the country Uzbekistan has the large reserves of explored and unexplored natural gas resources. Turkmenistan has world’s fourth largest reserves of natural gas.4 And all these existing potentials and unexplored resources have prompted the countries for better energy ties in the region. The countries are tied together by a network of electricity transmission, as well as oil and natural gas pipelines developed during the Soviet period. Energy systems have been well designed to take into account the locations of various energy sources, and thus, the oil refineries are basically located in the major oil-producing countries of the region like, Kazakhstan, Turkmenistan and Uzbekistan, with the refined products are being transported to Tajikistan and Kyrgyzstan. The regional gas pipeline network has been designed to allow delivery of gas from Turkmenistan and Uzbekistan to the Southern portion of Kazakhstan, Kyrgyzstan and Tajikistan. The plethora of pipeline networks and well intra-integration of the region possess opportunity for India’s energy quest in the Central Asia [4]. India’s Oil and Natural Gas Corporation—Videsh Limited (OVL)—has 15% stake in the oil field of Alibekmola in Kazakhstan and announced an investment of $1.5 billion in the Kurmangazy oil field of Kazakhstan in association with Russia. The OVL has received exploration rights in Darkhan, Tengiz, Karzahanbas and Aktyubinsk in Kazakhstan [5, 6]. The negotiations between the ONGC Videsh and KazMunaiGaz to develop oil and natural gas blocks in the Caspian region dates back to 2005, and in 2006, Kazakhstan offered ONGC—Mittal Energy Ltd. a 25% stake in the Satpaev offshore oil exploration block in the Caspian Sea. In April 2007, the Mittal Investments acquired 50% from Lukoil’s stakes from the Caspian Investments Resources (Kazakhstan), with a $980 million [5]. During the visit of the then Prime Minister Manmohan Singh to Kazakhstan in 2011, a final agreement was signed for a 25% stake in the Satpayev oil block, which holds about 1.8 billion barrels of oil in the Caspian region of Kazakhstan, and the drilling in this block took place during the visit of Indian Prime Minister Narendra Modi to Kazakhstan in 2015. The OVL has invested about $400 million for this block. However, the OVL in 2014 rejected

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the Kazakh government offer of its Abai oil block due to the then declining crude oil price. India has signed agreements with Uzbekistan and Tajikistan in 2006 in the energy sector, which among other things included exploration rights to the Indian companies without competing in the bidding process. In Uzbekistan, the Gas Authority of India Ltd. (GAIL) has signed a memorandum of understanding (MoU) with Uzbekneftegas for joint exploration and production of oil and natural gas resources [7]. The OMEL, a joint venture of ONGC and Mittal Energy Ltd., has won an exploration and production rights in Turkmenistan’s Block 11-12 from the Caspian Sea [5]. More to mention, but significant, the Turkmenistan–Afghanistan–Pakistan–India (TAPI) pipeline, initiated in mid-1990s, is expected to be a “transformative project” to meet the growing energy requirements of Afghanistan, India and Pakistan, and the pipeline is due for operational by the end of 2019 (details described in Chap. 7).

4.3 Energy in “Connect Central Asia” Policy To consolidate the gains and streamline its future, India in 2012 introduced the policy of “Connect Central Asia”. This approach can be interpreted in three ways: firstly, an “alternative” approach to China’s revival of silk route under the garb of New Silk Road initiative or One Belt One Road (OBOR) initiative; secondly, “compulsion drive policy” for existing and untapped resources and market; and thirdly, an “imperative role” due to ongoing geopolitical games, where India does not want to be a loser [8, 9]. The aim of the new policy is to expand India’s footprints in Central Asia, along with energy trade and investment. In a broader perspective, India has been seeking to integrate with the region under the strategic and security arrangements including military training. In 2017, the Indian and Kazakh armies engaged in a joint military exercise to strengthen bilateral security cooperation [10]. In Afghanistan, the neighbouring country of Central Asia, India has invested heavily as a part of its reconstruction initiative [8]. India is looking for reaching Central Asia through Afghanistan and Iran, bypassing the troublesome Pakistan. Hence, the ongoing development of Chabahar port in Iran can become an important anchor for trade through Iran directly or Iran through the territory of Afghanistan. The Chabahar port of Iran is poised to counter the Gwadar port in Pakistan, which is developed by China in its broad design of Chinese OBOR, and the port is expected to connect Central Asia for trade and business activities [8]. The signing of a trilateral agreement between India, Iran and Afghanistan in 2016 for the upgradation of Chabahar seaport and construction of railway tracks connecting to the port at a cost of $500 million will prove as a gamechanger in improving India’s connectivity with Central Asia, Afghanistan and Russia and a step towards the proposed establishment of International North South Trade Corridor (INSTC) [1]. Thus, if both the Chabahar (or along with INSTC) and Gwadar projects materialized, definitely there will be an intense competition between these two strategic ports to handle Central Asian cargo, shipment of LNG and supply of crude oil and petroleum products to India.

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In the recent years, the Indian Prime Minister Narendra Modi has taken very proactive policy towards Central Asia and visited all the five Central Asian countries in 2015. The Prime Minister Narendra Modi’s visit to all Central Asian countries is the second after Prime Minister Jawaharlal Nehru did in 1955. His visit postulated cooperation in energy sector, taping of natural resources, regional security, connectivity and streamlining of India’s image by framing a geostrategic development partnership, and thus, it conveyed a pivotal message that New Delhi wants to move from its “Connect Central Asia” policy to “Act Central Asia” policy. From the Central Asian perspective, New Delhi’s extensive engagement in their region is much awaited and desirable since absence of relatively less interaction by the Indian leaders has been created an atmosphere for other players to play bigger and even dominant role there [11]. Nonetheless, the Narendra Modi government has given Connect Central Asia a decisive push soon after coming to power, and New Delhi is determined today to regain its lost time and expand ties with these nations. “More than ready” and “keen leaderships” in this region, as expressed by the Modi government, are indicatives of India–Central Asia future relationship [1]. In a positive note, the St. Petersburg Economic Forum in June, 2015, examined the benefits accrued from India’s membership in EAEU.5 Both India and EAEU are on discussion on the free trade negotiations and preferential trade regimes, and the process for feasibility studies has already begun [12]. Moreover, the Indian government has started to assist Indian entrepreneurs and business houses to conduct trade fairs in the countries, which are clubbed under Commonwealth of Independent States (CIS), and a joint business council has been set up with Kazakhstan. Although the Indian footprints in the Central Asian hydrocarbon markets are well recognized yet there are some limitations and security issues which limit India’s access to Central Asia. India faces three continental or maritime challenges for smooth and secured access to energy resources in the five land-locked countries. In the absence of direct access to the Central Asian region, India largely depends on Afghanistan, Pakistan and Iran to access their territories for its trade and communications. Hence, India has to depend on the lands of Afghanistan, Pakistan and Iran for transportations of its energy requirements. But the challenges are many and much complicated. First, the non-state actors in Afghanistan have turned the country to the spring-board of anti-India militancy and terrorism. New Delhi is deeply concerned about who rules the country, i.e. if the country falls under the control of Taliban or Islamic State or any terrorist group, it could give rise to an Islamic radicalization of Afghanistan, which will have a destabilising effect on whole Eurasia, South Asia, West Asia, Russia, China and the Caspian belt [13]. Second, Pakistan is the country to connect India to Central Asia through Afghanistan. But, violence caused by the militants of Pakistan and Afghanistan has destabilising effect. Thirdly, Iran is a safe, secured and alternative route to connect Central Asia, although a bit expensive because of longer distance. However, the frequent international and US sanctions against Iran limit India’s quest for Central Asian connectivity through Iran. In a positive note, India’s role in Afghanistan has been growing as it is trying to counteract Pakistan’s growing commercial leverage in this country. Under a strategic and security partnership agreement signed in 2011, New Delhi is providing training

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to top Afghan army officials and units for counterinsurgency acts, light weapons and pilot training. Although Russia and the USA have their geopolitical rivalry in Central Asia, yet both the countries expect India’s larger involvement in the reconstruction, development and stability of Afghanistan. An unstable Afghanistan is a threat to the common interest of these three countries. But, there are differences in their approach. While Russia wants to interpret Afghanistan under its Greater Central Asian identity, the USA wants to integrate Afghanistan with South Asia, so as to check the larger role of Russia and China in Afghanistan and Central Asian. Evidently, Washington had backing to India’s initiation for Afghanistan’s membership in the SAARC. Further, the backing of TAPI by the USA is also to avert India from executing Iran–Pakistan– India pipeline since Washington does not want sanction-ridden Tehran survive with its energy economy. In the context of China, although there is a competition between China and India in the in Central Asian energy market and Afghanistan reconstruction process, yet Beijing wants larger role of India for stability and security in Afghanistan and Central Asia, since Beijing faces the problem of Uighur irredentism across its Central Asian border regions and restive Xinxiang province that connects Central Asia. In spite of international sanctions, there is ongoing negations for oil swap between India, Iran and Central Asia. Definitely, cooperation among the Asian countries will largely contribute for Asian energy security.

4.4 The Great Game Versus New Great Game Eurasian, which includes all the countries of Central Asia, in the second half of the nineteenth century and the early twentieth century falls to the rhetoric of “Great Game”, where both the imperial powers—monarchical Britain and Tsarist Soviet— struggled to get control of this part of the earth. This prompted Lord Curzon, the then Viceroy in British India, to compare Central Asia to a chessboard [14]. He believed that the Great Game for power and zones of influence took place on this board. After the World War-II and during the Cold War period, the Soviet Union consolidated its strength and sovereignty over the Central Asian territories, and with the end of Cold War, birth of Central Asian countries and wakening influence of Russia, the New Great Game emerged in the global geopolitics with a new structure having multiple complexities. Although Moscow’s geostrategic imperatives have remained unchanged, yet the “game” has become more complicated, with the energy emerging as a strategic resource in the geopolitical calculations. Of this Eurasian fulcrum, the Central Asian countries are much weaker today than their geographically proximate big neighbours—Russia and China. Russia has natural interest in Central Asia through various levers such as a large and influential Russian origin population; a good networking; economic dependence of Central Asian countries on remittances of migrants who have been working in Russia; Russian transit facilities for the landlocked countries; and a large-scale economic interdependence of the nations with the Russian republic. “The Central Asian countries realize the fact that

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they can neither overlook nor work without Russia, but at the same time, these countries are eager to see the decline of Moscow’s strong grip which has been holding them for the decades” [15].7 The Asian driver China is systematically and relentlessly drawing the Central Asian countries into its economic vortex. The growing domestic requirement for energy, a neighbouring market for its products, and energy infrastructure connectivity to its disjointed and restive Xinjiang province, are some of the Beijing’s core interests for which the country vehemently seeking for robust ties with these nations [15]. With a geostrategic approach towards Central Asia, China has made significant headways in the region with a $10 billion grants and aids to SCO members8 and development of regional linkages. China’s trade with the Central Asian region has crossed the US $50 billion mark by the end of 2013 [16]. Despite being benefitted from China’s economic trade and presence, the Central Asian countries today are wary of becoming economically over dependent on China and its demographic expansionism. Historically, China has been viewed by Central Asians as an expansionist and dominating power, and recent Chinese muscle flexing in Southeast Asia reminds them of their traditional suspicions over Chinese attitude towards weak neighbours [15]. Since 1991, and more specifically since the post-September 2011, the geopolitical developments have created the ground for the USA for its larger presence and military bases in this region, largely on security ground, strategic location of the region, regional balance and diversification of the regions resource exploitation [17]. The USA somehow likes to keep the Central Asian region away from the Chinese and Russian sphere of influence and integrate them economically with Afghanistan and South Asia. The South Ossetian crisis in Georgia and the ongoing Russia– US standoff over Ukraine and Syrian crisis have reinforced US determination to consolidate its presence and sphere of influence all over the world, including Central Asia. Congruence to this, the Central Asian countries expect the USA to check both the mammoth powers—China and Russia although they do not like any US military base (s) in the region. These countries have well realized the US proclivity and act in the Eurasian region in the form of “colour revolutions” and regime change on the alleged human rights violations [15]. The Rose revolution in Georgia (2013), the Orange revolution in Ukraine (2004–2005), the Tulip revolution in Kyrgyzstan (2005) and the violent protests in Uzbekistan (2005)9 have clearly developed a climate where the Central Asian countries are looking for increased relationship with Russia and China vis-à-vis the USA, and thus, Washington is in dilemma in balancing two of its major foreign policy goals such as democratization and counterterrorism. Further, Russia and China are in cooperation with each other to thwart possible US dominance in the region [18]. Under this New Great Game rhetoric, the imminent question arises, where does India fit into this? Historically, India was the prize in the “Great Game” in which the UK competed for control over Central Asia, so as to restrict Soviet’s access to the Indian subcontinent [19]. Yet, British India, subsequently India, never posed as an ideological and territorial challenge and threat to Central Asia. Hence, Central Asia has always been reinforced by close and cordial relationships, starting from the Soviet period. Today, the Central Asian countries want a more active Indian presence

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to balance the major powers who have their large presence there. However, India is a passive observer to these events. It is neither alarmed like Russia and China, nor excited like many western powers to contribute significantly to the ongoing geopolitics. The response of New Delhi to the developments in Central Asia was well articulated by the then Defence Minister of India, Pranab Mukherjee, who in his speech at Washington asserted, “by nature India is not inclined to the ideologies which are imported, and even the ideologies which the region believes in and follows. New Delhi would rather endorse democracy and stability in the region by precept and example. The independent atmosphere is a factor for moderation and democracy, and it must continue in India–Central Asia relationship” [20]. Since there is a growing convergence of interest between the USA and India in the region, both the countries are reluctant to see the Central Asian region falling under the exclusive influence of China or Russia or both of them. This has been evident when India was so much worried over commensurate rise of China in the 1990s and Russia’s fast-growing influence towards the end of 1990s under the leadership of Valdimir Putin [21]. Washington has supported an increasing Indian presence in Central Asia. Stability and security are most crucial to US interest in South Asia that includes Afghanistan. Hence, engaging India and Central Asia is crucial for the USA to ensure economic reconstruction, peace and stability of Afghanistan which is bordering Central Asia and rest of the countries in South Asia. On these lines, the USA has strongly backed and approached the concerned countries to materialize TAPI pipeline. According to Stephen Blank, “Washington’s presence in Afghanistan allows India to play, or at least aspire to, a greater Central Asian role than it could achieve on its own [22].” Crucially, the emerging partnership between the USA and India will be bound by many convergent and complimentary interests, including “preventing Asia from being subjected to any single power that has the capacity to force out others” [23]. Furthermore, the USA wants India playing a bigger role in Afghanistan and Central Asia since its troops in the region have started to decrease in recent times. It is obvious fact that the United States, Russia and China have become great competitive powers, and the direction on which India tilts or the pragmatic approach it pursues would largely determine the future course of India’s interest and geopolitical role in the region. Thus, India is very cautious in doing trade with China and Central Asia, who frequently echoes the multipolar world, specifically within the SCO forum. Since the establishment of the Shanghai Cooperation Organization (SCO), India is not sure what priority the organization deserves and also not interested in the new geopolitical equilibrium, largely set by China and Russia. Yet, India does not want to keep itself away from the organization and the role it shapes. In the initial years of SCO, India was represented by Minister of Petroleum and Natural Gas, but subsequently, the Indian prime ministers have attended the conference [24]. Although the organization is intended for peace, security and counter-terrorism among the member countries and where India has a genuine interest of stability, yet the increasing Chinese role putting New Delhi in a quandary of its role. India got an opportunity in SCO only through a bargaining with China, in spite of having strong backing of Russia. India was invited as Observer to SCO only when China was granted Observer

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status in the SAARC. Likewise, when India turned as a member of SCO, China brought Pakistan to the forum [25]. China’s obstructionism towards Indian efforts to engage in Central Asia could be largely attributed to Beijing’s interpretation of New Delhi as a “stalking horse” for Washington. In terms of Indian and Chinese trade with Central Asia, in 2012, it was estimated that India’s overall trade volume with the Central Asian countries was $500 million, whereas for China, it was $46 billion. Further, the September 2013 visit of Chinese Premier Xi to Central Asia resulted in signing of mammoth contracts worth of $48 billion investment and loan, covering energy trade and energy infrastructures [3], and the fear reinforced that China will undermine India’s ongoing negotiations and deals for energy assets there [26]. However, it is the fact that China receives about 40 bcm of natural gas annually from Turkmenistan and 20 million tonnes of oil from Kazakhstan [1], and the figure is projected to rise much higher if the Uzbekistan– Kazakhstan–China energy pipeline materialized. China possesses and controls about one-third of oil and natural gas reserves of Central Asia; Turkmenistan exports about 70% of its natural gas to China [27], and Beijing is unhappy with the ongoing TAPI pipeline project since it will decrease Central Asian countries dependence on China for energy supplies, their diversification of energy in international energy market and thus larger presence of India in the Central Asian energy market [27, pp. 8–9]. However, the progress of TAPI and US backing of TAPI have resulted in Beijing’s interest in joining the TAPI pipeline network,10 and this can be a broader agenda of Pakistan and China to limit Indian leverage in South Asian politics and Central Asian geopolitics of energy security. Further, in its geo-economic competition, in past, China had out bidden India in some of the major competitions. In June 2013, India lost out when Kazakhstan blocked its deal to buy a major stake in the Kashagan oil field from a US company ConocoPhillips, with a sum of $5 billion Production Sharing Agreement and then sold it to China to secure 8.4% stake from the oil field worth of $5.2 to 5.4 billion [27]. India has also lost Daulatabad gas field to China in Turkmenistan [28]. In the context of geo-economic and geopolitical complexities and troubled relationship with the West, Russia is assertively looking for India’s support to enhance energy cooperation in the Central Asian energy market [11]. Since the late 1990s, Moscow is expecting New Delhi’s role as a counterweight to Chinese and American influence in the region. Russia has backed India’s entry to SCO membership and has talked to the Indian counterparts for New Delhi’s participation and contribution for the Collective Security Treaty Organisation (CSTO).11 The much talked INSTC [29]12 is a progressive idea of Russia where India can expand its energy footprint, trade and investment with Central Asian nations and an alternative route to OBOR initiative of China. Since there is a complementarity of interest India can also look for Russia’s hand for larger presence in the Central Asian energy market. In the process of expansion of Russia-Kazakhstan–Belarus Customs Union, India is optimist of its membership in the forum,13 and New Delhi is looking for a greater trilateral trade arrangement that will include India in the existing Russia–Kazakhstan trade arrangements. If materialized, India will “feed into” the privileged trade agreement for preferential trade and removal of customs barrier [30]. Further, the talk is

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going on between India and Russia and other stakeholders to conclude a Free Trade Agreement between India and the EAEU.14 In the ongoing geopolitical calculus, Moscow has shown its increasingly uneasiness over a power-sharing agreement among India, Tajikistan and Russia on the Ayni air base in Tajikistan. China does not expect India’s airbase in Tajikistan since the former does not want latter’s leverage in the Central Asian region. On the other way, in 2010, the Tajikistan government declared that no power-sharing is happening between Russia and India in the air-base,15 and the base is currently manned by the Russian forces only [31]. All these have happened despite India’s expenditure of $70 million by 2010 to renovate the Ayni base, extending the Ayni runway to 3200 metres, installing the state-of-the-art navigational and air defence equipments there [28]. In the context of energy market, Russia has a deep connection with the five republics, and its giant energy company Gazprom strictly guards its control over Central Asia’s energy and energy infrastructure, thus putting India at a strategic check [27]. Nonethless, the countries in the region and Russia making it imperative for India to engage and invest in the region in a more substantial manner than it was in past. The countries have recognized the growing concerns in the region and have sought to harness Indian investment and its presence, and thus thwarting of dominance and interference by big powers [32]. Since India is never projected as a colonial or neocolonial power in Central Asia, the countries have adorned India as partner of trade and security. Apart from regional and sub-regional institutional arrangements, India has engaged the Central Asian countries individually. Tajikistan, which borders Pakistan, Afghanistan, China, Kyrgyz Republic and Uzbekistan, is recently hailed by Prime Minister Narendra Modi a “close ally of India”, a “valued friend” and a “strategic partner in Asia” [8]. Emomali Rahmon, the President of Tajikistan, has been in extensive discussions with India for a bilateral defence and security arrangement, as well as expansion of the existing relations. India is in discussion for joint military exercises and increased trade and investment opportunities with Kyrzyzstan. The Kyrgyzstan President Atambayev’s visit to India in 2016 concluded with a joint statement with his Indian counterpart which pledged to enhance the bilateral trade from the existing trade of $27.99 million [8]. While the Kazakh President Nursultan Nazarbayev shunned by the West for his re-election, New Delhi engaged him for regional and national security and economic growth. The two main areas that were given serious consideration by both the countries included energy and stability in Afghanistan. Both the countries have prepared legal framework and future roadmap for enhanced cooperation for energy supply. India is also looking for possible cooperation for the extension of Friendship Railway Bridge from Uzbekistan to Herat in western Afghanistan. All these indicates that New Delhi’s country-specific ties are growing, where India has been largely projected as a stabilizer, security provider and energy partner [21]. An Assessment Although the Central Asian region is a priority of Indian foreign policymakers under the Connect Central Asia Policy, yet its engagement with the region is much comparable to China, Russia and the USA [33]. Existing game in the Central Asian region,

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conflicting interests in South Asia and lack of direct land access to Central Asia hinder and limit India’s larger presence in the Central Asian energy market. It is time for New Delhi to give the region a sustained attention it deserves. The “Connect Central Asia” policy should be assertive and time-bound, and if possible making it Forward Central Asia policy or implementing Act Central Asia policy in a more effective manner. Otherwise, India will have to struggle hard to sustain its existing gains with a forward look. According to Ambassador Rajiv Sikri, “in order to protect and preserve its existing interests in the region, New Delhi has no alternative option but to closely consult and cooperate with the other major stake holders who have an interest and a presence in Central Asia [34].” India has to develop an assertive approach in the reconstruction programme of Afghanistan, so as to steadfast India–Central Asia energy rout. Iran has a vital place for Central Asian energy transportation, but while dealing with Tehran, New Delhi has to take a cautious and balanced approach so that the relations with the West are not compromised. Much depends on how India bargains with the West while pursuing its vital interest with Iran. If Afghanistan is stabilized and Pakistan provides its territorial access to Central Asia, India’s problem of transit facility for energy resources will be resolved on a long-term basis [35]. Moreover, streamlining cooperation between India and Central Asian countries is of a mutual benefit for all the countries involved in the Greater Central Asian region. India needs to take full advantage of India’s positive image and its historical and cultural ties to re-build stronger developmental partnership with the region. However, China has emerged as the key player in the region with the offers of billions of dollars of economic assistance for the exploration of energy and development of energy infrastructures in the Central Asian countries. It is the hard reality that “China’s assertiveness in the region today next to impossible for India to counter” [19]. In the geopolitical calculus at the global level, while there is an increasing tension between Russia and the USA, there is a sense of growing relationship between Russia and China, and the USA and India. Yet, there is a sense of growing relationship among Russia, China and India in Central Asia. This is evident that what the Chinese policymakers pushed forward the Russian Prime Minister Yevgeni Primakov’s proposal for Russia–China–India triangle in 1998, and the idea has been discussed at various official as well as non-official forums.16 However, in the backdrop of these alignments and re-alignments in the region, the Central Asian countries expect India to play a very pro-active role for security, stability and balance in the region [11]. Although the growing interest of India in the region is well recognized by the Central Asian countries, yet India has no interest of playing the role of a big power in the region. While delivering a talk at the Shanghai Institute of International Studies, Shyam Saran, the then Foreign Secretary of India said that the rhetoric of “balance of power” or “conflict of interest” is “outdated” under the dynamics of Asia’s quest for peace, prosperity and interconnectedness”.17 But, there are some other arguments which indicate that India should play a pro-active role in the region to safeguard its vital national and global interest in the region. Since an increasingly powerful China asserts itself in Eurasia, America scrambles to deal with the consequences, Russia does not allow to lose its zone of privilege, and India still holds many cards to purse [36]. The Narendra Modi government today is looking assertively towards the Central Asian countries

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to safeguard and promote its national interest in the wake of New Great Game which is going on in this region. End Notes 1. 2. 3. 4. 5.

6.

7.

8. 9.

10. 11. 12.

13.

14. 15.

16.

Maues or Moga was the first Saka King in India. ‘Which Regions were connected by the Silk Road’? Tell me About History, London: Chancellor Press, 2016, p. 67. The EAEU consists of five countries like Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. BP Statistical Review of World Energy, 67 edition, June 2018, pp. 26. EAEU is a political and economic union that was established on 29 May 2014 and came to force on 1 January 2015, with the five countries of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. Fourth India-Central Asia Dialogue. 2016. Indian Council, of World Affairs, New Delhi, December. www.icwa.in/pdfs/creports/2014/recomendationforth indiaasiadialogue.pdf. The countries of this region are apprehensive of Russia’s ‘never leave’, new military alliance under the CSTO and formation of Collective Rapid Action Force within the CSTO-using military units of the member countries of this organization to deal terrorism and narco-trafficking. The Shanghai Cooperation Organisation (SCO) consists of Russia, China, Kazakhstan, Uzbekistan, Tajikistan, Krygyzstan, India and Pakistan. The incident is well known as the Andijan massacre, where the government forces of President Islam Karimov successfully stopped the country falling to civil war and revolution. ‘China keen to join TAPITurkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project: Pak Official’, The Times of India, August 9, 2018, p. 11. CSTO is sometimes referred as the Russian NATO. The INSTC is a 7200-km-long, multi-modal (ship, rail and road) transportation system for connecting the Indian Ocean and Persian Gulf to the Caspian Sea via Iran and thereafter to Russia and North Europe, and New Delhi hopes to put INSTC in place by the end of 2020. The Customs Union is Russia’s quest to reassert its influence over the postSoviet region and it has been pursued since the establishment of EurAsEC in 1996. Kyrgyzstan and Tajikistan plans to join the Customs Union. This Union is expected to lead to the formation of a proposed Eurasian Union of ex-Soviet states, as announced by Vladimir Putin in 2011. A study group has been established to verify the feasibility of the proposal, cited in [16]. The Ayni airbase is important since it is close to the “bases” of anti-Indian terrorist groups in Pakistan and close to the territory where both Pakistan and China have been engaged in military excercises, in [5]. ‘China, India, Russia hold First Trilateral Summit’, People’s Daily, July 18, 2006, http://english.people.com.cn/200607/18/eng20060718_284028.html.

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17. “Present Dimensions of the Indian Foreign Policy” An Address by Indian Foreign Secretary Mr. Shyam Saran at Shanghai Institute of International Studies, Shanghai, January 11 2006, http://meaindia.nic.in/speech/2006/01/11s s01.htm.

References 1. Sajjanhar, Ashok. 2016. India-Central Asia Relations: Expanding Vistas of Partnership. New Delhi: Observer Research Foundation. http://www.orfonline.org/expert-speaks/india-centralasia-relations-expanding-vistas-of-partnership/. 2. Raja Mohan, C. 2015. A Passage to Inner Asia. The Indian Express, July 6. https://indianexp ress.com/article/opinion/columns/a-passage-to-inner-asia/. 3. Sachdeva, Gulshan. 2017. Changing Dynamics of India–Central Asia Ties, 5 Apr 2017. https:// bishkekproject.com/memos/24. 4. Laxmi, Vijay. 2007. India-Central Asia Relations: Quest for Energy Security. Dialogue, 8 (4). http://www.asthabharati.org/Dia_Apr07/laxm.htm. 5. Pop, Irina Ionela. 2010. China’s Energy Strategy in Central Asia: Interactions with Russia, India and Japan. UNISCI Discussion Papers, October, no. 24, revistas.ucm.es/index.php/UNIS/article/viewFile/UNIS1010330197A/26956. 6. Blank, Stephen. 2005. India’s Energy Offensive in Central Asia, Central Asia-Caucasus Analyst, vol. 6, no. 5, 3–5. Central Asia-Caucasus Institute, 9 March 2005. www.cacianalyst. org/resources/pdf/issues/20050309Analyst.pdf. 7. Sachdeva, Gulshan. 2007. ‘India’. In The New Silk Roads: Transport and Trade in Greater Central Asia, ed. Starr, S. Frederick. Central Asia-Caucasus Institute & Silk Road Studies Program, p. 351. 8. Yeyaz, M. 2016. Is India Finally Getting Serious About Its Connect Central Asia Plans? WIRE. https://thewire.in/88943/india-central-asia/. 9. Jha, Martand, 2017. Looking at Central Asia—India’s Extended Neighbourhood, March 4. http://www.indiandefencereview.com/news/looking-at-central-asia-indias-extended-neighb ourhood/. 10. Dwivedi, Neha. 2017. Can India ‘Connect’ With Central Asia? India has yet to translate its aspirations in Central Asia into reality. The Diplomat, November 30. https://thediplomat.com/ 2017/11/can-india-connect-with-central-asia/. 11. Roy, Meena Singh. 2015. PM’s Visit to Central Asia: Envisioning India’s Pro-Active Policy Approach towards the Region. http://www.indiafoundation.in/pms-visit-to-central-asia-envisi oning-indias-pro-active-policy-approach-towards-the-region/. 12. Vzglyad, Olga Samofalova. 2014. Historic Agreement Makes Eurasian Union a Reality. Russia Beyond, 2 June 2014. https://www.rbth.com/business/2014/06/02/historic_agreement_makes_ eurasian_union_a_reality_37113.html. 13. Campbell, Ivan. 2013. India’s role and interests in Central Asia. SAFEWORLD, 7. October. https://www.saferworld.org.uk/downloads/…/indias-role-and-interests-in-central-asia.p. 14. Muller-Kraenner, Sascha. 2008. Energy Security: Re-Measuring the World, 28–29. Abingdon: Earthscan (Routledge). 15. Sikri, Rajiv. 2015. Thoughts on India’s Central Asia Strategy. Vivekananda International Foundation, 2 July. http://www.vifindia.org/article/2015/july/02/thoughts-on-india-s-central-asiastrategy. 16. Pant, Harsh V. 2015. Great Game in Central Asia. Livemint, 12 July. http://www.livemint.com/ Opinion/nWqSenAnd5JE4qJbCbKW3L/Great-Game-in-Central-Asia.html.

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17. Foshko, Katherine. 2012. India in Central Asia Time for a New Strategy. Gateway House Research Paper No. 4, February, pp. 40–41. www.gatewayhouse.in/wp-content/uploads/…/4.Central-Asia-Paper-PDF_no-crops.pd. 18. Sachdeva, Gulshan. 2006. India’s Attitude Towards China’s Growing Influence in Central Asia. China and Eurasia Forum Quarterly 4 (3): 30. 19. Subramanian, Samnath. 2015. Iran may be India’s key to Central Asia. The National. https:// www.thenational.ae/world/iran-may-be-india-s-key-to-central-asia-1.34346. 20. Rousso, Alan. 2006. Speech by the Defence Minister of India at Washington, on June 27, 2005. In Escaping the Resource Trap: Market Reform and Political Governance in the Resource Rich Countries of Eurasia. China and Eurasia Forum Quarterly 4 (3): 31. 21. Pant, Harsh, V. 2017. India can’t allow Chinese to overshadow its influence in Central Asia: It is time New Delhi gives the region the attention it deserves. dailyO, 9 June 2017. https://www.dailyo.in/politics/china-central-asia-russia-shanghai-cooperation-organisat ion/story/1/17730.html. 22. Blank, Stephen. 2005. India’s Energy Offensive in Central Asia. Central Asia Caucasus Analyst 6 (5): 3–5. 23. Tellis, Ashley, J. 2005. The U.S.-India Global Partnership: How Significant for American Interests? Testimony before the House Committee on International Relations. www.carnegieendo wment.org/publications/index.cfm?fa=view&id=17693&prog=zgp&pr oj = znpp,zsa,zusr. 24. Ramachandran, Sudha. 2005. India Gives Shanghai the Cold Shoulder. Asia Times Online, 17 June. www.atimes.com/atimes/South_Asia/HF17Df01.html. 25. Sachdeva, Gulshan. 2006. India’s Attitude towards China’s Growing Influence in Central Asia. China and Eurasia Forum Quarterly 4 (3): 23–34. Central Asia-Caucasus Institute: Silk Road Studies Programme. 26. Campbell, Ivan. 2013. India’s Role and Interests in Central Asia, October. https:// www.saferworld.org.uk/downloads/…/indias-role-and-interests-in-central-asia.p…28. Subramanian, Samnath. 2015. Iran may be India’s key to Central Asia. The National. https://www. thenational.ae/world/iran-may-be-india-s-key-to-central-asia-1.34346. 27. Wallace, Richard. 2014. India’s Quest for Energy in Central Asia. The Diplomat. https://thedip lomat.com/2014/08/indias-quest-for-energy-in-central-asia/. 28. Pant, Harsh V. 2017. India’s growing interest in central Asia is well-recognised…but it’s not the only country wanting more influence, Mail Online India, June 8, http://www.dailymail.co. uk/indiahome/indianews/article-4585912/India-s-growing-central-Asia.html. 29. Roy Chaudhury, Dipanjan. 2017. India and China new players in Central Asia’s ‘Great Game. The Economic Times, October 2. https://economictimes.indiatimes.com/news/defence/indiachina-new-players-in-central-asias-great-game/articleshow/60905273.cms. 30. Sibal, Kanwal. 2012. Devoid of Excitement, India-Russia Ties Have Remained Consistently Resilient. Force, January, p. 6, In Katherine Foshko. 2012. India in Central Asia Time for a New Strategy. Gateway House Research Paper No. 4, February, p. 54. www.gatewayhouse.in/ wp-content/uploads/…/4.-Central-Asia-Paper-PDF_no-crops.pd… for mention of this. 31. Ramachandran, Sudha. 2010. India Air Base Grounded in Tajikistan. Asia Times, 1 December 2010. 32. Pant, Harsh V. 2011. Why Central Asia Matters to India, April 25. http://www.rediff.com/news/ column/why-central-asia-matters-to-india/20110425.htm. 33. Jha, Martand. 2017. Looking at Central Asia—India’s Extended Neighbourhood’, 4 March. http://www.indiandefencereview.com/news/looking-at-central-asia-indias-extendedneighbourhood/. 34. Sikri, Rajiv, 2007. Beyond Oil and Gas: India’s Interests in Central Asia. Global Envision, 29 June 2007. 35. Starr, S.Frederick. 2005. A partnership for Central Asia. Foreign Affairs 84 (4): 73. 36. Raja Mohan, C. 2005. Why Delhi Must Rediscover Moscow. The Indian Express, 3 Dec. http:// iecolumnists.expressindia.com/full_column.php?content_id=83161 (20 Aug 2006).

Chapter 5

The Latin America and the Caribbean (LAC): An Introspection

This chapter attempts to analyse India’s foreign policy approach towards the resource markets of LAC, oil and natural gas potentials in this region, the nature and extent of Indian trade and investment, LAC in India’s foreign policy and Chinese competitions. All these aspects are well explained with, how a neglected region in the past has emerged in India’s foreign policy discourse and how the post-Cold War scenario and India’s economic reforms have generated a plethora of opportunities for IndiaLAC energy relations. The existing potentials, new discoveries and undiscovered resources are the promising factors for India-LAC energy trade. The chapter, along with general approach to the region, analyses the relations through a country-specific approach which are the major suppliers to India’s energy basket. The countries in this regard include Colombia, Ecudor, Brazil and Venezuela. Brazil has posed as new shale energy market, whereas Venezuela has the highest reserves of proven oil reserves in the world. However, Venezuela is highly sanctioned by the international community, and the socialist and ambiguous policies of the successive governments in the country create troubles for the oil-importing countries to do trade and invest in the hydrocarbon sector. At the regional level, the ongoing bilateral conflicts, rigid tariff regimes and communication problems (language), along with long distances, pose some limitations on India’s quest for energy trade and investment this region. The chapter finally assesses to what extent Indian government and Indian foreign policy are assertive for India-LAC relations in the oil and natural gas sector.

5.1 The Potentials The Latin America and the Caribbean (LAC) consists of 33 countries, including the countries of South America, Central America and the Caribbean. In general, the South American continent predominates among the LAC countries; Brazil is the only Portuguese-speaking country in LAC, and the Caribbean’s, basically the island countries and who are of mixed-language, politically and economically counts less © Springer Nature Singapore Pte Ltd. 2020 S. K. Pradhan, India’s Quest for Energy Through Oil and Natural Gas, https://doi.org/10.1007/978-981-15-5220-5_5

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in the LAC. However, the Spanish colonial history and language gives uniformity to the larger parts of Latin America. Considering India’s relations with this region in the past, Latin America is the last region to which the Indian government opened up its foreign policy. Geographically, it is also one of the most distant regions, and from a historical perspective, India had the least contacts and connectivities. Yet, New Delhi expressed its solidarity with the LAC in their anti-colonial struggle. However, unlike Africa, the entire region was not so enthusiastic with India’s Non-Aligned Movement (NAM). India’s membership in the NAM and the Commonwealth, on the one hand, and the Latin American countries’ close regional integration, on the other, meant that India and Latin America belonged to two different “clubs” in international politics [1, 2, p. 4]. Although India–Latin America relations have remained slow throughout most of India’s post-independence period primarily because of two reasons: geographical distance and competing Indian domestic and international primacies. Nevertheless, India’s historic ties with certain Latin American nations are longstanding. Following Fidel Castro’s ouster of the Batista regime in Cuba in 1959, for example, India became one of the first countries to recognize the new government and to establish a post-revolution embassy in Havana. Prime Minister Nehru visited Mexico in 1961, while Indira Gandhi embarked on an 8-nation tour of the region during her tenure as prime minister [3]. R. Viswanathan, the Indian Ambassador to Argentina, Uruguay and Paraguay, in an interview with the Financial Express newspaper, said that, “The Latin American market today has come out of the past adversaries of unpredictability, instability, cycles of booms and busts. The Indians should not waste time reading the history of India-LAC relations; rather, should look at the present and future which are promising and result-oriented” [3, 4]. The Latin America’s deposits of mineral resources such as oil and natural gas, iron ore, copper, tin, coal and lithium are extremely attractive to India, and relations with Latin America today are primarily driven by the economy, where improved access to natural resources and raw materials has played a significant role. In a landmark move, India hosted its first India-CELAC (Community of Latin American and Caribbean States) Foreign Ministers’ Dialogue in 2012 which indicated that the decades of political and economic gaps have come to a conclusive end, with a constructive engagements and bridging the gap where oil and natural gas resources have taken pivotal role in India-LAC trade and investment opportunities. The LAC constitutes about 332.7 tmb (52.34 tmc) oil reserves, i.e. 19.28% of the global reserves, and production constitutes 8605 tbd (437.3 million tonnes), which is 9.6% of the total global production, by the end of 2018. The major oil-rich countries are Venezuela, Brazil, Ecuador, Argentina and Colombia. In the context of natural gas, the whole region possess 8.4 tcm (295.4 tcf), i.e. 9.14% of the global reserves. In the context of production, the LAC produces 214.2 bcm (184 million tonnes) which is 5.6% of the total global gas productions. The major oil-rich countries are Venezuela, Brazil, Mexico, Ecuador, Argentina and Colombia (Tables 5.1 and 5.2). Peru and Trinidad and Tobago have small reserves; however, the recent discoveries in Trinidad and Tobago have made the country as one of the new frontiers of natural gas in the region. Venezuela has the largest reserves of oil in the world. However, due

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Table 5.1 Total proved oil reserves and production in LAC by the end of 2018 Oil reservesa

Productionb

Country

Thousand million barrels (tmb)/thousand million tonnes (tmc)

Global share (%)

Thousands of barrels per day (tbd)/million tonnes

Global share (%)

Venezuela

303.3/48.0

17.5

1514/77.3

1.7

Brazil

13.4/2.0

0.8

2683/140.3

3.1

Mexico

7.7/1.1

0.4

2068/102.3

2.3

Ecuador

2.8/0.4

0.2

517/27.7

0.6

Argentina

2.0/0.3

0.1

592/27.6

0.6

Colombia

1.8/0.3

0.1

866/45.6

1.0

Peru

1.0/0.1

0.1

154/6.4

0.1

Trinidad and Tobago

0.2/0.04

0.04

87/3.9

0.1

Other

0.5/0.1

Total

332.7/52.34

0.04 19.28

124/6.2

0.1

8605/437.3

9.6

a Reserves

include gas condensate and natural gas liquids (NGLs) as well as the crude oil crude oil, shale oil, oil sands and NGLs (the liquid content of natural gas where this is recovered separately). Excludes liquid fuels from other sources such as biomass and derivatives of coal and natural gas Source BP Statistical Review of World Energy, 68 edition, June 2019, pp. 14, 16, 17

b Includes

to internal contradictions, sanctions and confrontation with the west, the production has reduced drastically (Tables 5.1 and 5.2).

5.2 Trade and Investment India’s trade with the LAC has grown from a mere $500 million in 1990–1991 to around $2 billion in 2001 and crossed to $32 billion in 2011–2012, a 50-fold increase in 20 years. LAC’s share of India’s export has increased from 2.22 to 4.46% between 2000–2001 and 2011–2012, respectively, and in 2012–2013, there was an impressive increase to 11.21%. The LAC’s import share has grown from 1.42 to 3.38% during 2000–2001 and 2011–2012. By the 2012–2013, Latin America and the Caribbean, as per Indian statistics [5, pp. 44–45], accounted for 5.05% of India’s imports. By 2012–2013, the trade between India and LAC had reached to $46 billion. India’s trade with Brazil stood at almost $11 billion; Mexico $5.6 billion; Chile and Colombia $3.6 billion and 3.2 billion, respectively. The bilateral trade volumes with Argentina, Venezuela and to a lesser extent with Peru have progressed drastically, which is largely due to fuel and commodity imports such as crude and edible oil. The incredible increase in trade in recent years is largely increased due to India’s

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5 The Latin America and the Caribbean (LAC): An Introspection

Table 5.2 Total proved natural gas reserves and production in LAC by the end of 2018 Natural gas reservesa

Productionb

Country

Trillion cubic metres (tcm)/trillion cubic feet (tcf)

Global share (%)

Billion cubic metres (bcm)/million tonnes oil equivalent

Global share (%)

Venezuela

6.3/223.8

3.2

33.2/28.6

0.9

Brazil

0.4/13.4

0.2

25.2/21.6

0.7

Peru

0.4/12.4

0.2

12.8/11.0

0.3

Argentina

0.3/12.2

0.2

39.4/33.9

1.0

Bolivia

0.3/10.3

0.1

16.0/13.7

0.4

Trinidad and Tobago

0.3/10.9

0.2

34.0/29.2

0.9

Mexico

0.2/6.5

4.9

37.4/32.1

1.0

Colombia

0.1/3.7

0.1

12.9/11.1

0.3

Other

0.1/2.2

0.04

3.3/2.8

0.1

Total

8.4/295.4

9.14

214.2/184

5.6

a Those

quantities that geological and engineering information indicates with reasonable certainty can be recovered in the future from known reservoirs under the existing economic and operation conditions b Excludes gas flared or recycled. Includes natural gas produced for gas-to-liquids transformation Source BP Statistical Review of World Energy, 68th edition, June 2019, pp. 30, 32, 33

purchases of crude oil and other basic raw materials such as copper and edible oil. It is significant to note that the major oil and natural gas exporting countries of LAC are the largest trading partners of India. Moreover, a significant portion of LAC energy is exported to Asia, primarily China (25.3 million tonnes), India (11 million tonnes) and Singapore (9.4 million tonnes).1 Latin America in 2014 constituted 18% (3.7 mbd) of India’s global crude oil imports which was an increase from 4.5% in 2003.2 Oil and natural gas constitutes a significant share in overall trade volume between India and LAC countries. Between India and Venezuela, it is 99.5%, followed by Colombia (88.6), Cuba (78.1), Ecuador (65.3), Panama (55.7), Mexico (52.9) and Brazil (32.4) [7]. The ONGC Videsh Limited (OVL) and the private sector companies like Essar and Reliance have their inroads to the LAC. The Essar Oil, a subsidiary of India’s Essar Group, has agreements in place with most of the Latin American countries to extract heavy oil and bought more than 10 million tonnes of crude oil from Venezuela, Colombia, Mexico, Brazil, Cuba and Ecuador, in 2012 [2, p. 5], and entered into a major equity and trade relationship with these countries. Further, India’s enormous capacity particularly on its West Coast for refining crude will compliment LAC’s inadequate crude refining energy infrastructures. The Reliance India Ltd. and Essar Oil with their huge refining capacities have received a large quantum of LAC crude. The region’s recent discovery of deep offshore oil, Argentina’s shale energy and Mexico’s opening of its upstream sector for investment are some of the

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recent developments which have opened new vistas for a reliable supply of energy for India’s energy requirements. The Indian equity in Cuban oil and gas blocks has totalled US$ 70 million, though production has not yet commenced significantly in any of the fields. Reliance and Jindal have separately acquired oil and gas exploration blocks in Peru. The Gas Authority of India Ltd. (GAIL) is considering a US$ 1 billion investment in Trinidad and Tobago, which is a major global LNG exporter. So far, the spot and short-term Trinidadian LNG is being imported by India from the Atlantic LNG [8], and the OVL in 2005 invested US$ 200 million in natural gas reserves there [9]. The country Bolivia has poised as an important destination of natural gas resources to meet India’s growing natural gas requirements. The main Mexican export to India is crude oil, and other exports include fertilizers, iron and steel and engineering goods. Apart from oil and natural gas import, India has potential energy investment in Brazil, Colombia and Venezuela and owns the Operator Rights or Joint Operator Rights in those blocks (Table 5.3). Through a country perspective detail analysis, India, in 2012, imported about 10% of its crude oil requirement from Venezuela and overtook China as the largest Asian buyer of the Venezuelan oil. The Indian public and private sector companies have invested heavily there. The joint ventures between OVL and Venezuela’s stateowned oil company PdVSA have involved a total investment of US$ 2.6 billion, and production is estimated to reach at 85,000 bpd by 2016 [9]. Venezuela is cooperating with India in the energy sector, not just in exporting but capitalizing India’s investment; here, the OVL and the Reliance Industries Limited (RIL) have large stakes. The country is the main supplier of crude to the Jamnagar Refinery (Gujarat) of RIL, which is one of the biggest refineries in the world. Former President Hugo Chávez’s “energy integration” strategy is meant for the development of the Orinoco Oil Belt, which is estimated to hold about 233 billion barrels. The Orinoco Oil Belt is divided into 27 blocks, and five Latin American national oil companies, such as Brazil’s Petrobrás, Argentina’s Energía Argentina S.A. (ENARSA), Uruguay’s Administración Nacional de Combustibles Alcohol y Portland (ANCAP), Ecuador’s Petroecuador and Chile’s Empresa Nacional de Petróleo (ENAP), have committed to work alongside PdVSA in the development of the oil fields. Along with these five companies, the OVL and Lukoil (Russia) are party to the nine-country consortium to the development of these oil fields [10]. In 2010, Venezuela awarded Indian oil companies 40% ownership interest in a mixed enterprise to develop the Carabobo1 North and Carabobo-1 Central blocks in the Orinoco Heavy Oil Belt in eastern Venezuela.3 Colombia has a 1.7 tmb oil which constitutes 0.1% of the global reserves, and production constitutes 851 tbd, i.e. 0.9% of the global production. Likewise, natural gas constitutes 0.1 tcm, which constitutes 0.1% of global share, and its production by the end of 2017 was 10.1 bcm, i.e. 0.3% of the global share. Oil production in Colombia exceeds domestic consumption, and over 70% is exported to countries such as the USA, the Netherlands, China, India and Panama. Agreement between the Colombia and India on protection and promotion of investments signed in 2009 got implemented in 2012. The Indian companies have already shown their interest in expanding their energy footprint in Colombia in exploration, production and

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Table 5.3 Major Indian overseas projects/assets in LAC by the end of 2018 S. no.

Country

Name of the project

Participating companies and their share

1

Brazil

Block BM-SEAL-4

Brazil ONGC Videsh—25%, Petrobras—75% (Operator)

BC-10, Brazil, Offshore

ONGC Videsh—27%, Shell—50% (Operator), Qatar Petroleum International—23%

BM-SEAL-11 (3 blocks), Sergipe Basin

Petrobras (Operator)—60%, IBV 40%

BM-C-30 (1 block), Campos Basin

Anadarko Petroleum (Operator)—30%, British Petroleum—25%, Maersk—20%, IBV 25%

BM-POT-16 (2 blocks), Potiguar Basin

Petrobras 30% (Operator), BP—30%, Galp Energia—20%, IBV 20%

Mansarovar Energy Colombia Limited (MECL), Colombia

ONGC Videsh—25–50%, Sinopec—25–50%, Ecopetrol—50% (Jointly Operated)

Block RC-8, Colombia

ONGC Videsh—40% (Operator), Ecopetrol—40%, Petrobras—20%

Block RC-9, Colombia

ONGC Videsh—50%, Ecopetrol—50% (Operator)

Block RC-10, Colombia

ONGC Videsh—50% (Operator), Ecopetrol—50%

Block LLA-69, Colombia

ONGC Videsh—50%, SIPC—50% (Jointly Operated)

Block GUA OFF 2

ONGC Videsh—100%

CPO-5, Colombia

ONGC Videsh—70% (Operator), Petrodorado—30%

SSJN7, Colombia

ONGC Videsh—50%, Pacific Rubiales Energy (PRE)—50% (Operator)

San Cristobal Project

ONGC Videsh—40%, PdVSA—60% (Jointly Operated)

Carabobo-1 Project, Venezuela

ONGC Videsh—11%, IOC—3.5%, OIL—3.5%, Petronas—11%, PdVSA—71% (Jointly Operated)

2

3

Colombia

Venezuela

Source Chapter 6, International Cooperation and Engagement, Annual Report, 2017–18, Ministry of Petroleum and Natural Gas, Government of India, 2019, pp. 95–96

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refining levels. Indian companies such as OVL Group plan to develop a number of exploration blocks. India has seven projects in Colombia, where the OVL investment share is between at least 25% (MECL) to 100% (Block GUA OFF 2). The OVL has invested about US$ 600 million in oil and gas joint ventures in Colombia, and oil production has already commenced in many oil fields. Like the public-sector company OVL, the Indian private sector companies like Reliance and Essar companies import the Colombian crude oil. Very recently, the Essar Oil has struck a crude import deal with Colombia’s state-owned company Ecopetrol, and in 2007–2008, the OVL had increased its participation interest in Colombian deepwater offshore blocks with Ecopetrol. Likewise Indian private company Essar, the Reliance has invested US$ 50 million in the Colombian energy sector. The export of Colombian petroleum products to India in 2009 constituted 449 items, of which only petroleum products and crude counted 351 items. Since there is an increase in Colombian export of crude oil to India, trade volume between the two countries has increased drastically and India has turned as fourth biggest export destination in 2013, a great step ahead to its 16th largest export destination in 2011. Of these total exports to India, oil alone constituted 96.2% of Colombia’s export. The trend was similar in the first quarter of 2014, where the trade volume between the two countries increased to $6000 million (Colombia export-$5000 million and India-$1000 million), a drastic shift from $1500 million trade (India export-$900 and Colombia export-$600 million) in 2012. With the energy boom, the Colombian economy, in 2014, clocked the highest growth rate in the region, i.e. 4.9%, and within a short span of six years, the number of Indian companies has grown from six to thirty-five. Hence, there are enough opportunities for Indian investors in Colombia to establish a competitive and cost-effective investment. The Colombian energy market is open for the new investments. The OVL has formed a joint venture with Chinese oil and gas operator Sinopec for exploration and development activities in the Middle Magdalena Valley. A few Indian companies, such as oil and natural gas independents Bharat Petroresources, Videocon Petro and Reliance Petroleum, are already active in this country. The offshore discovery of Orca and Kronos-1 gas fields in 2014 and 2015, respectively, has reinforced country’s booming prospect of hydrocarbon potentials. The energy cooperation between the two countries has increased recently with the visit of Dharmendra Pradhan, the Indian Minister of Petroleum and Natural Gas, to Colombia in 2015, where a Joint Working Group was set up to expand energy opportunities in future. Colombian hydrocarbon firms could benefit from accessing the large Indian requirements and market. The oil field service companies in Colombia have the opportunity to tap its energy resources that could benefit from the Indian investment, technologies and processes [12]. Colombia has created a conducive atmosphere for energy trade with India. This can be illustrated through the fact that Colombia is a party to treaties and international conventions that promote FDI and provide investor-state dispute resolution procedures; it has signed several agreements, particularly on the protection and promotion of investments, and ratified bilateral treaty of Avoidance of Double Taxation.4 More to say, Colombia’s legal and financial systems are clear and open among all the Latin American countries which makes it a favourable place for Indian investment there.

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However, there are also some limitations within the country. The country witnesses a number of environmental and social obstructions which pose some level of uncertainty in the formulations and execution of resource development projects, such as licensing of the extraction sector. The Indian companies interested in operating and investing in far away areas where the government has control over law and order situations. But, in the recent years, the Colombian government has been very sincere and active to overcome the ongoing challenges and made some progress in this regard. The recently establishment National Authority for Environmental Licences in the country has made licencing and procuring process more efficient and less time consuming [12]. By the end of 2017, Ecuador possessed 8.3 tmb oil, which was 0.5% of the global reserves. Likewise, its production during the same period constituted 531 tbd, i.e. 0.6% of the global production. India had expected to get about two million barrels of crude shipments from Colombia by the end of 2018. In September 2018, a cargo carrying Ecuadorian oil arrived in at the Indian port Sikka [14]. The boost in energy trade between the two countries has begun with the visit of Mr. Eduardo Lopez, the Minister of Energy and Mines of Ecuador, to India in January 2005 where he was the keynote speaker at the Petrotech events organized by the Ministry of Petroleum and Natural Gas, Government of India. Congruence to this, an MoU between OVL and Petroecuador signed in 2006.5 The Indian embassy in Bogotá, Colombia, is concurrently accredited to Ecuador, and Ecuador has opened its Embassy in Delhi in 2005.6 By the end of 2017, Brazil had 12.8 tmb of oil that constituted 0.8% of the global reserves, and production constituted 2734 tbd which was 3.0% of the total global share. Likewise, natural gas reserves constituted 0.4 tcm (0.2%), and production constituted 27.5 bcm, i.e. 0.7% of the global share. Brazil by 1960s was importing about 80% of its oil requirements from its neighbouring countries or West Asia, and the country suffered from severe energy crisis in 1970s. But, since then, the country has been pursuing aggressive policies to enhance production of energy and minimization of oil import. After discovering enormous oil fields off its southern coast, Brazil is becoming an energy powerhouse [15], and with the liberal incentives and favourable policies of the Brazilian government, from the 1980s, the country has turned as a net exporter of energy, and foreign investments in the energy sector have increased [16, p. 8]. The annual average of India’s import of oil and natural gas during the period 2008–2010 constituted 32.4% of its total bilateral trade with Brazil [7]. This trend continued even afterwards. The bilateral trade between India and Brazil had increased to $9000 million (India—$6000 million and Brazil—$3000 million) in 2013, where oil constituted a large chunk,7 and the total estimated investments by Indian oil companies in Brazil had reached to US$ 5 billion in 2014.8 Noteworthy to the Indian investment, the OVL has bought 15% of Brazil’s oil fields in a single auction that took place in 2006 [2, p. 5]. In April 2006, OVL acquired a 10% participating interest in a block in the Brazilian Campos Basin from Shell company. Between 2008 and 2010, the OVL strengthened cooperation with the Petrobras by holding participation stakes in deepwater offshore blocks.

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Significant to add, the Reliance company has signed agreements with Brazilian companies for export of diesel in exchange of crude import for its oil refinery at Jamnagar in Gujarat. In Brazil, large growth is expected in its upstream oil exploration and production sector, with 44 offshore production units stated to be operational by 2030. Significant oil blocks will be from southeastern state of Espirito Santo, where the production is slated to conducted by Petrobras, Brazil’s largest oil company. Another major site is the city of Macaé, around which there are several offshore oil industries. Several international oil and gas companies, including companies in India, in recent the past, had backed off their exploration, research and development (R&D) activities in spite of declining crude price. Brazil’s hydrocarbon industry is now working hard to revive fossil fuels and provide thousands of jobs back to the struggling oil and natural gas industry in the country. Since the economic conditions of the country are improving and the foreign investors are back to business in the country, there is the prediction for a major turnaround of oil in Brazil, and the Brazilian government is expecting million of new jobs in the energy sector by 2020. According to the study of Federation of Industries of the state of Rio de Janeiro there has been greater flexibility in local laws and policies, several external investments and new projects are going to take off in the oil and natural gas sectors [17]. Both India and Brazil are engaged in institutional arrangements for energy cooperation. During the BRIC conference at Yekaterinburg, Russia, 2009, India and Brazil supported each other for the diversification of energy resources and supply route, energy transit security, new investments and energy infrastructure, which establishes linkage between energy producers, transit countries and consumers. In the BRICS conference, 2012, both the countries stood for “multilateral energy cooperation” [18]. Although much progress has been made between Russia–India energy cooperation under the BRICS platform, yet India–Brazil energy trade has to take a headway under this forum. To speed up bilateral trade and energy cooperation, India–Brazil Economic and Financial Dialogue was held in 2013 in New Delhi and India-Mercosur PTA was signed in 2004. This treaty entered into force in 2009 under which 450 items, including oil and natural gas, were subjected to duty reductions, i.e. from 10 to 100%. Efforts are underway to broaden and deepen the India-Mercosur PTA and link this to India–Brazil–South Africa (IBSA) forum. Significant to energy trade, Fernando Coelho Filho, Minister of Mines and Energy of Brazil, visited New Delhi from November 5–7, 2016, to attend Petrotech 2016 and hold other meetings on the sidelines of Petrotech.9 India-Brazil PTA has turned itself as a trailblazer for such arrangments with other countries in the region. To enhance trade, negotiations over a PTA have started between India and Peru. Both the countries have agreed to start negotiations for a free or preferential trade agreement which could help in boosting energy trade [19]. The expanded Preferential Trade Agreement (PTA), signed in 2016 and executed in 2017, between India and Chile, has widened the scope for future trade. Accordingly, Chile has offered concessions on some 1798 tariff lines with a Margin of Preference (MoP), ranging between 30 and 100%, and New Delhi has offered concessions on 1031 tariff lines with a MoP ranging between 10 and 100%. Ecuador, in 2017, expressed its interest in signing a preferential trade agreement (PTA), and Colombia has also shown

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5 The Latin America and the Caribbean (LAC): An Introspection

its interest on this context as well. If materilaized, then there will be an enhanced energy trade between India and Ecuador and Colombia. In addition to these ideas and developments, there are other institutional arrangements which have promising future for India-LAC cooperation. India-Mercosur10 preferential trade agreement, signed in 2004 and came to force in June 2009, is an institutional arrangement to foster bilateral trade and investment in the different sectors of economy, with a specific reference to energy trade and investment.

5.3 Geopolitics and Security Challenges 5.3.1 Venezuela—Oil Socialism or Oil Curse? Venezuela, which possesses the largest crude oil reserves in the world, was a relatively stable democracy with fast rising economy in the LAC region. The new discoveries of oil wells in 1922 in the Maracaibo Basin of western Venezuela had a forecast of 100,000 barrels of oil per day, that indicated a large quantity of oil reserves in the country. The then-dictator Gen Juan Vicente Gomez allowed more than 100 foreign oil companies to invest and explore the oil reserves in the country. It is very worthy to mention that by 1928, Venezuela becomes the second-biggest oil exporter in the world after the USSR [20]. But, the influx of oil revenues led to oil oligarchy and boost to Venezuela’s military regime to personalize and monopolize the oil revenues. In 1943, law was enacted where the foreign companies were asked to pay half of their profits. Although the oil sector was flourishing, yet agricultural sector was highly neglected and the prime land was concentrated by a handful of powerful and reach families; infrastructure was neglected; and the country had no clear cut agricultural and rural policy with a holistic approach. Since the oil revenues were not well distributed and agriculture was not promoted and unrest continued in the country, the dictatorial ruler Marcos Perez Jimenez was overthrown on 1958. But, the overthrow of the Marcos Perez Jimenez government did not bring any solution to the challenging issues in the country. The coalition government led by Romulo Betancourt, who is well known as the Father of Venezuelan Democracy, became the president of the country. However, the power-sharing agreement (Punto Fijo Pact) among the coalition partners in the government established a system in which each of the parties was guaranteed with a slice of government ministries, jobs and contracts in the oil sector. Nonetheless, the OPEC oil embargo against the USA and its allies in 1973 resulted in global shortage of oil that resulted in skyrocketed crude price rise and increase of Venezuelan oil revenue. But the withdrawal of sanctions against the USA led to the decline and normalization of crude price in the global market. So, the Venezuelan economy could not adjust to the shock, and two years later, Venezuelan President Carlos Andrés Pérez signed a law that nationalized country’s oil industries and created a state-owned oil company called Petróleos de Venezuela, S.A. (PdVSA). The establishment of PdVSA and

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giving autonomy to it was an indicative of energy economy growing in right direction, but government’s policy of 60% control over foreign assets resulted in decreasing of foreign investment in the country and declining of economic growth. This situation was further aggravated towards the 1980s where crude price declined and the country’s debt reached to $33 billion [20]. Finding no other options, Venezuelan went to IMF bailout (1996). Under the IMF package, the government severed expenditure in social sectors, and thus, there was a sharp rise of consumer goods and basic necessities of life, nation-wide protests, demonstration and violence, which finally led to a nation-wide curfew and suspension of civil liberties. Under this juncture of social unrest against the government’s reformist policies, a new saga developed in the Venezuelan modern history with the rise of Hugo Chavez who got elected to the president position in 1998 and sworn in 1999. After coming to power, Chavez embarked on a massive social expenditure in health, educational, food and housing programs for the poor and rural population of over 30 million, of the total 43% of Venezuelans living below the poverty line, and came out of IMF and World Bank in 2007 so as to have more control over social expenditures. To address the nation’s social needs and in an effort to bring Venezuela’s energy closer to “the people”, the Chávez government overtly asked PdVSA for social funding and social developments. As a consequence, PdVSA’s social spending augmented from $249 million in 2003 to $13.26 billion in 2006. The Economic and Social Development Fund (FONDESPA) and National Development Fund (FONDEN) were the major beneficiary of the oil revenues. During his period, twenty-two social missions were funded to contribute for the local communities and rural people [10]. To channelize PdVSA’s profit for the social sector, government brought the company under its direct control and dismantled the autonomy of the company since Huge Chavez and his government criticised pdVSA for being “State within the State” and “Arrogant” [21, pp. 175–187]. Though Chavez government tried to diversify the Venezuelan economy, his massive social expenditure did not leave any room for investment in agriculture and allied fields. So, diversification of different sectors of economic could not get materialized. Rather, towards the end of his period, overdependence on the energy sector increased, oil revenue diverted for the populist measures, energy infrastructure neglected, and overall decline of the Venezuelan economy which can be best explained under Dutch disease. The onset of the Dutch disease,11 specifically starting from Hugo Chavez, has proved catastrophic to the economic development of the country. His spending in social programmes did not leave enough space to absorb the shock of the Dutch disease, thus leading to massive government debt and domestic shortages. Venezuela, in fact, has a 98% [22] of its export earnings from its oil and natural gas resources. While its oil industry flourished at the global level, the country neglected other sectors of economy. Further, since the major earnings of the PdVSA were spent for the social sectors, investment in the energy sector neglected and the country faced problems in the growth of oil industry and possible stagnation in production. Venezuela basically faced problem in two counts: first, shortage of foreign currency due to stagnation in export of other commodities and second, socialist measures of the country. Further, the Bolivarian revolution12 of Chavez also added much to his radical

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nationalist approaches. In 2007, while the oil prices were on the rise,13 Venezuela sought more revenue from the multinational companies since the investments made by the international oil companies began to pay off. Chavez demanded changes to the agreements signed by the international oil companies that would give PdVSA majority control over the projects. While Chevron, Total, BP and Statoil agreed and retained their minor rights and interests in the projects, the ConocoPhillips and ExxonMobil left the country and their assets were confiscated. The socialist measures of Chavez government also led to firing of the well-skilled Venezuelans who were critical to Chavez’s energy policy and employed his own loyalists instead in 2003. Further, in 2007, he retrenched foreign technicians and experts in the oil fields. The rising price of crude oil was an opportunity for Venezuela; however, it failed to reinvest adequately in this capital-intensive energy industry. So, in spite of oil price rise in 2007, the production was in a steep decline. Further, in 2015, Venezuela’s oil production had fallen to 2.6 million bpd, a decrease of 20% below the 2006 levels [22]. The oil socialism and policy mismanagement have led to corruption in the country. However, corruption is not a new phenomenon in Venezuela. It has been in existence in Venezuela since the country got independence from Spain in 1821, under the leadership of Simón Bolívar. In the nineteenth and twentieth centuries, the level of corruption fluctuated, depending on who had been in power. During the period of President Hugo Chávez, however, the corruption exploded to an unprecedented level. Billions of Venezuelan Bolívar or Bolívar Soberano14 were stolen or unaccounted, resources squandered and political elites and Chavez benefitted in the system.15 Indeed, the windfall of oil revenues has encouraged the level of corruption till date. In his initial eight years of rule, Chávez had received between $175 and $225 billion from oil and new debts, which were mostly kept top secret.16 But increase in revenues resulted in decline of government transparency. This can be well explained that the PdVSA ceased publishing its consolidated annual financial statements in 2003, and Chávez had created a new financial institutions, whose operations were also opaque, and the spending of funds went to the discretion of the top government authorities. Bureaucrats rarely followed the existing bidding regulations, and common citizens had to pay if they want to know bureaucratic transactions provided there is a scope for getting information. Even any officer, if found involved in corruption charges, he or she just gets removed from his or her respective posts, without legally making him accountable. The irony is that Chávez who came to power largely on an anticorruption could not check; rather he brought the country to the brink of collapse, where Nicholas Maduro, the present president of Venezuela, became the immediate cause for the present-day crisis in the country. Since his ascendency to power in 2013, the oil production has declined and the corruption level has increased manifold. It is estimated that in Venezuela, about $100 billion oil revenue has been misused in the last 25 years.17

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5.3.2 Venezuela-US Imbroglio Apart from oil socialism, Caracas has been the victim of US-Venezuela imbroglio on anti-west approach of the successive governments in Venezuela. Hugo Chavez even before his election in 1998 went to the public with his battle cry “Oil is a geopolitical weapon” and accused the USA for attempted coup to overthrow him and devastating oil lock out in 2002–2003. He bluntly accused America as an “Imperialist Power”, and US plans are to see him assassinated. President Chavez’s reference to the “stench of sulphur” in his comments following American President George Bush’s UN speech in 2006, and branding USA as Devil confirm the hostility and tension that exists between the two countries.18 In an extremity, Chavez gave a clear message to the USA that if he were killed, the USA would not receive a drop of oil for another thousand years [24]. Some of the historical issues and present developments have culminated in present-day bitter relationship between the two countries. Venezuela’s socialist approach, freezing of foreign assets, involvement in regional politics, uniting the LAC countries for regional integration and robust relationship with Washington’s historical rivals—Cuba, Iran and Russia culminated in drifting of US—Venezuela relationship and US antagonism. Specifically, there have been the issues which have put Venezuela and the USA at loggerheads. Venezuela supported the overthrow of Anastasio Somoza, a close ally of the USA, in Nicargua in 1979; contained of US policy through the Contadora Group in 1980s; subsidised oil exports to central America and the Caribbean; provided aid and donation under Petrocaribe; attempted integration through PETROSUR; promoted a controversial natural gas pipeline from Venezuela to Southern Cone; supported like-minded political parties in El Salvador (FMLN) and Nicaragua (FSLN); and financed like-minded leaders in their elections—Rafael Correa (Ecuador), Ollanta Humala (Peru), Evo Morales (Bolivia) and Andres Manuel Lopez Obrador (Mexico) [25, 26]. Further, Caracas pushed for global crude price rise that resulted in increase of crude price from 35 dollar in 2000 to 100 in 2006–07, forced the international companies and foreign countries for renegotiation of the terms of contracts that signed by his predecessors, and instead looked new investment and better trade opportunities from the non-traditional partners like India and China [27]. On the lines of Chavez, Ali Rodriguez Araque, the Minister of Energy and Mines and former OPEC Secretary General reduced oil production in the country,19 so as to increase oil price at the global level. Hence, the price of crude skyrocketed, reached its highest level since the US attack on Iraq in 1991. He also advocated for greater restraint in crude output in order to keep oil prices high. Industrialized nations, like the USA, were not happy with these developments. In seeking to rally on the OPEC nations, Chavez seemed to be taking up the guidelines of Juan Pablo Perez Alfonzo, a Venezuelan energy minister and founding father of OPEC, who helped and worked to loosen the stronghold of western oil companies on the energy producing nations. “OPEC has arisen again”, Chavez remarked, and in a further slap, Venezuela shipped 53,000 barrels of oil per day to Cuba, the historical rival of the USA, under the preferential rates, which was not acceptable to Washington [28, p. 25]. The USA

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was also much concerned with OPEC’s revitalization under Rodriguez’s regional approach. President Bill Clinton once called for lower oil prices in 2000, an appeal that Chavez dismissed, and argued that the oil prices were fair for developing nations. Tensions and differences were ratcheted up further between the USA and Venezuela during the period of George Bush. The oil prices had nearly doubled and Washington found it tough to bargain and withstand before the renewed role of OPEC, which was largely the result of sharp strategies of Chavez and Rodriguez [29]. In recent years of Nicholas Maduro, the successor of Hugo Chavez, there has been overspendings in the social sector, lower oil prices and political unrest in the country which have altogether triggered economic crisis in Venezuela that was once counted as a prosperous nation among all the South American and Caribbean nations. Starting in 2014, the South American nation begun suffering a startling collapse with Venezuela’s GDP plummeting even more than the USA during the Great Depression, and the people in the country are even not able to pay for their basic necessities of life and shortage goods and services throughout the country. Because of the socioeconomic decline, more than 2 million people have left the country since 2014. This large-scale migration has diminished country’s workforce, including those who work in the oil industry. As a consequence of shortage of labour force, the Venezuelan oil production has reduced to its lowest ever point in more than 70 years. In June 2018, the production fell to 1.34 mbd, which was 800,000 barrel drop from the previous year [30]. Meanwhile, the political system in Venezuela has spiralled into a turmoil with a controversy. President Nicolás Maduro’s reelection in 2018 is tainted with irregularities and ragging [20]; the country is under strong civilian protests and uprisings, which has been instigated by Juan Guaido, the opposition leader of the elected National Assembly whose legislative powers and functions were taken away by the Maduro government in 2017. The USA has backed Guaido leadership and has imposed sanctions against the oil and gold mining industries and selected political leaders in the country. In April 2019, it also imposed sanctions against the Central Bank of Venezuela, cut-off Venezuelan banks access to US financial market and thus restricted country’s international transactions, and kept all the options open in its tactical approach to deal the Venezuelan crisis.20

5.4 A Wavering India? Amid domestic crisis and economic sanctions by the western countries, specifically the USA, Venezuela has been looking extensively for the Russian, Chinese and Indian market to pump its energy resources. Before the August 2019 sanctions, PdVSA supplied over 500,000 bpd to the USA, its largest market, followed by India 300,000 bpd21 and China. On the wake of sanctions, Venezuela sent Manuel Quevedo, the oil minister, to India to convince refiners to double their crude imports. “We are selling 300,000 bpd to India and want to double that amount”, he said [31]. The rise in US domestic oil production and US sanctions against Venezuela in 2014 under Barack Obama government resulted in a 49% reduction in American oil imports

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from Venezuela that created an opportunity for India to increase crude oil imports from Venezuela. In a positive sign to Maduro government, India has continually refused to recognize Juan Guaidó as the legitimate leader of Venezuela. Russia, China and India are among the more than 100 countries which have not recognized Guaidó government who has claimed as the acting president of the country. Raveesh Kumar, spokesperson of the Ministry of External Affairs of the government of India, stated: “We are of the view that it is for the Venezuelans to find political solution to the existing differences through constructive dialogue and acts without resorting to violence”. He further commented: “India believe in democracy, durable peace and security, which are paramount importance to the progress and prosperity of the country”.22 India has already instructed its refiners to avoid payment system controlled by the US dollar or banking system. The private refiners—Reliance Industries and Nayara Energy—import the major share of 300,000 barrels per day (2019), down from 340,000 barrels per day (bpd) in 2018 and 380,000 bpd in 201723 which have been largely due to domestic issues of Venezuela and insistence of the USA to cut oil imports. This is in consistence to what US secretary of state Mike Pompeo had approached to India not to become an “economic lifeline for the Maduro regime”.24 Nevertheless, due to the current crisis and massive US influence on the international financial transactions, the only viable alternative option for Indian refiners is to pay in the local currency. Following a proposal from Venezuela and suggestion from the crude refiners in India, the Ministry Petroleum and Natural Gas has proposed setting up an alternative and viable mechanism whereby entire transactions will be made in rupee. Of course, the rupee trade can secure Indian buyers oil interest in Venezuelas, but problem is that the most of the sale proceeds may lie unused in India because of huge trade imbalance that exists between the two countries. The trade between India and Venezuela is $6 billion,25 of which exports from India comprise barely one percent and crude oil imports mainly dominate the trade. On the other side, Venezuela’s import of Indian drugs, textiles and food has fallen in recent years due to its financial crisis. On this juncture, Venezuela has also approach to India for barter trade. At the Petrotech conference in Greater Noida, India, 2019, Manuel Quevedo, the oil minister in Venezuela, said that Venezuela was open to conduct barter trade with India, which would provide India an opportunity to balance its trade with Venezuela. In the fiscal year 2017–18, India’s imports from Venezuela were worth of $5.87 billion, while its exports counted $79.3 million.26 Therefore, a barter system could be a step forward for the trade deficit to be bridged. Currently, India has limited items to export to Venezuela and trying to expand its trade basket which will include, apart from other items, rice and pharmaceuticals. Venezuela has also showed its interest in collaborating with India for health, biotechnology, remote sensing and IT sectors. This idea of barter is in congruence to what Caracas did with the China. Just before the imposition of sanctions by the Trump administration, President Maduro in his visit to China expressed his intention to increase one billion exports to China through the barter system, which would be in return for the loans Venezuela received from China, i.e. $50 billion over the last decade, although Caracas still owed $20 billion to Beijing. Nonetheless, China, Like Russia, has already started

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importing more crude from Venezuela, agreed to invest $5 billion more to boost crude production, and barter as a means for trade has been introduced [32].

5.5 Challenges with a Different Kind There are general and specific problems which hinder India’s energy trade with the LAC. First, although the Indian companies and business have gradually increased their presence in the LAC, in 2015, it was found that China, the main competitor of India had $230 billion trade with the LAC, which is six times more than India, and by 2025, China had pledged to invest $250 billion basically in the field of energy and energy infrastructure, and the gap between the two countires is expected to rise [5, p. 39]. Further, India represents just one percent of LAC’s overall trade, compared with China’s 10% share.27 India’s high degree oil dependency has brought both India and China in cooperation as well as competition in the region. The challenges for New Delhi are how to engage in a region where Beijing has similar interests, and where China’s relations are deep rooted. India’s bitter bidding experience in Ecuador demonstrated that the competition over oil assets abroad between the two countries has turned imminent, where New Delhi had lost the deal to Beijing.28 In another instance of contrast, in April 2010, when Argentina put restrictions on Chinese imports and China stopped buying of Argentina soybean oil, India increased its soyabean import so as to avert that country’s economic disturbance. Although there has been a competition between India and China to expand their footprints, there are instances where both China and India have worked together. In 2006, the ONGC and Sinopec set up a joint venture named Mansarovar Energy Colombia Limited (MECL) for acquiring Omimex de Colombia Ltd. in Colombia. In April 2008, India and China entered into a joint venture agreement to develop oilfields in Venezuela’s Orinoco Basin [11]. On the matters of diplomatic engagements with the LAC countries, Beijing has embassies in 21 countries, whereas New Delhi has only 14 embassies in that region. Over the years, the Chinese presidents, prime ministers and foreign ministers have made frequent visits to the LAC countries, whereas Indian counterparts have only a few visits and only a couple of heads of the states of these countries have visited India. There have been no high-level Indian officials who have ever visited Bolivia where India has FDI projects. Chinese concessional credit lines are ample and available to all countries, irrespective of big and small, whereas Indians are smaller and confined to some of the Caribbean and Central American nations only [15]. Second, extortion and kidnapping in Colombia have turned the country into a level of insurgency in the 1960s and a full-fledged civil war in the 2000s. The genesis of the current conflict goes back to the 1960s, when two major insurgent groups— the Fuerzas Armadas Revolutiocionarias de Colombia (FARC) and Ejercito de Liberation National (ELN)—were established with the support of USSR and Cuba, respectively. Oil turned into the limelight of tension when the Occidental Petroleum

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Corporation of USA discovered the major oil fields in the southern state of Arauca in 1983. Since then, ELN has resorted tactics of kidnapping of employees and attacking of oil infrastructures, and bargaining with the government so as to get financial benefits and fulfill its agenda. Its slogan of “Awake Colombia they are stealing the oil” [33] has many takers from amongst the weaker and deprived sections of the society. The ELN’s tactics, however, are too successful to give up. In 1984, Ecopetrol S.A., a Colombian company, suggested Mannesmann AG, a Germany company, to come to the terms with the rebels, who were responsible for attacks, kidnapping of oil workers and labour strikes. In 1986, the Mannesmann AG paid a large sum of cash to the ELN to complete its 84-mile pipeline on schedule, which would transport oil from Arauca to the Caribbean coast [33]. Third, in some of the LAC countries, there is the difficulty for Indian companies to enter on account of the political rigidity of the ruling establishments. In Ecuador, India’s OVL has not been able to activate a bilateral MoU, that was signed in 2006, because of the Ecuador government’s insistence on service contract against production-sharing mechanism. The OVL is poised to drill its first exploratory oil well in offshore Cuban waters, but it is not clear what juridical regime of the Cuban government will impose on any foreign joint ventures [5, pp. 42–43]. The OVL has bidding for oil blocks in Ecuador in association with the country’s oil companies. But, Ecuador’s reluctance to allow production sharing has limited Indian investment in the country, although the country has commenced oil exports to India. Fourth, India has political differences exist with Argentina over the Las Malvinas (Falklands) islands issue [34]. In the past, India supported the claims of Argentina over the Las Malvinas island, but currently, New Delhi appears to have taken a neutral stance. ONGC Videsh made a recent bid to acquire a stake in exploration blocks off the disputed islands from a British energy company. But this bid was eventually blocked by the Indian government due to the complicacy of the issue [35]. Fifth, the energy transport infrastructure is still in its early stages in the LAC region. Political difficulties and differences in the Andean North do not allow the scope for a larger integration of energy infrastructures. Brazil’s Ten Year Plan estimated a steady increase of natural gas supplies in Brazilian Amazonia area, but the country had failed to prepare a plan for transportation of such resources. In some cases, the energy transmission lines, gas pipelines and other such energy infrastructures turn underutilized or unutilized in the region due to policy inconsistency and ambiguities [16, p. 11]. Sixth, in LAC, there are different regional and sub-regional organizations which have diversified approaches. The Pacific Alliance (Mexico, Colombia, Peru and Chile) is market-oriented; the Mercosur (Argentina, Brazil, Paraguay and Uruguay) has a mixed history of ups and downs; the ALBA (Venezuela, Cuba, Bolivia, Ecuador, Nicaragua and four smaller countries) is a state-controlled socialist approach; the Central American Integration System (SICA)29 faces internal contradictions and the Caribbean Community and Common Market (CARICOM)30 is yet to integrate fully among the member countries. Likewise, the Organization of American States (OAS)31 has yet to take a unified stand on the challenges the region facing today.

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Seventh, in the context of soft power approach, the scattered Indian communities in LAC are vastly outnumbered by the Japanese, Chinese, Korean and West Asian population, and absence of a strong archival material and expertise, official and academia interaction, and think tanks have limited the scope for interactions and energy trade between India and the LAC. Eighth, India has been partially successful in revitalizing the country’s outreach to Latin American countries. Despite its increasing engagements with the Latin American countries the relationship is not as per the expection, if compared to other regions of the world. Except a couple of countries, New Delhi has little interest in other countries. In spite of the strengthening of trade relations, in 2011/2012, only 4.4% of India’s total exports went to Latin America, and only 2.4% of total Indian imports came from that region [36]. For several years, India has also conducted small-scale development projects in various Latin American countries; however, only 0.01% of India’s total development cooperation flowed into Latin America in 2011–2012 [37]. Unlike China, India barely has the necessary resources to expand its foreign policy engagement in Latin America [2, p. 5]. An Assessment The diplomatic, cultural and economic relations between India and LAC have grown recently, but these are marginal in extent and not up to expectations. Although the relationship is without political controversy, New Delhi is yet to exploit the rising opportunities. According to Lalit Mansingh, the former foreign secretary of India, “Africa and the LAC are the regions where India was under-represented in past. While our neglect of Africa has been rectified, we still need to make all these efforts in the Latin America”. Noting that, he said, “with increasing globalization, the problems related to connectivity are addressed and reduced. Now the idea is that all countries are important and thus the outreaches to small island nations are equally important”.32 Hence, India’s future interactions with LAC countries need to downplay the differences, and New Delhi should look into how these far-off countries can be better connected and interacted [38]. On a similar note, Melb Pria, Mexico’s ambassador to India, “The LAC region is a geographical area from which India can get benefited enormously; neglecting it, would be a mistake; and Latin America is the key to India’s journey for a world leader” [39]. Undoubtedly, it is a fact that India has the potential to become Latin America’s major Asian partner if it starts engaging with the region on a consistent manner such as regular conduct of conclaves and initiation of India-LAC Hydrocarbon conference on the lines of India–Africa Hydrocarbon Conference, creation of an Energy Forum for energy security. In the post-Cold War era, India-LAC energy trade, to an extent, is influenced by the extent of US-LAC relationship. While America is cutting down its oil imports to boost and compensate with domestic production of shale energy, Latin America is in urgent need of countries like India who are willing to import its oil resources. The LAC countries do not want to be victims of their overdependency to big powers like China and the USA. In this clout, the fast-growing GDP of India raises hope for better trading partnership between New Delhi and the countries of LAC [19]. The US withdrawal of Trans-Pacific Partnership (TPP) has some implications for

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India to enhance India-LAC trade. The TPP, however, had extra clauses for patent protection and on many clauses of its statue which went beyond the WTO standards. On the other way, Pacific Alliance (PA) is an opportunity for India to get linked with the regional trade of the LAC countries like Mexico, Colombia, Chile and Peru which are fast growing economies, with stable and transparent government and least protectionism. A step forward, India has achieved the “observer” status in the alliance.33 In August 2012, the Indian government initiated interaction with the Community of Latin American and Caribbean States (Comunidad de Estados Latinoamericanos y Caribeños, CELAC) by hosting the first India-CELAC Foreign Ministers’ Dialogue which is an attempt to bring new momentum to India’s relations with Latin America and energy trade. At the bilateral level, India’s increased interest in the region in recent times can be well explained through the exchanges of visits by the leaders of India and LAC countries, i.e. while during 1947–2000, there was just 12 visits, in 2001–2011, it was 12 [2, p. 5]. Prime Minster Narendra Modi’s visit to Brazil for the Brazil, Russia, India, China and South Africa (BRICS) Summit in 2014 hinted at a promise for a greater engagement: “I have also had the privilege of sowing the seeds of personal relationships with each of the leaders of BRICS and the regions where do they belong. I look forward to seeing them blossom into the deep and strong personal bonds in the forthcoming days” [41]. The obvious reference here is that the New Delhi wants to foster its ties with the whole LAC through one of Brazil, one of the major players in this region. The India-LAC energy trade in recent times is increased, although not up to the expectations, and India still relegates LAC countries to the backwater of diplomacy [40]. End Notes 1. 2.

3.

4. 5. 6. 7.

8.

BP Statistical Review of World Energy, 2005–2011. International Energy Agency [6, p. 119]; and Seshasayee, Hari, ‘India’s Rising Presence in Latin America’, Americas Quarterly, https://www.americasquar terly.org/content/indias-rising-presence-latin-america. Hongbo [11]. ‘Real business between India and Colombia began just five years ago’, The Dollar Business, https://www.thedollarbusiness.com/magazine/-realbusiness-between-india-and-colombia-began-just-five-years-ago-/17449. The Avoidance of Double Taxation Agreement was signed between Colombia and India in 2011 that came to force in 2014, in Zárate and Vidal [13]. India-Ecuador Relations, Ministry of External Affairs, Government of India, https://www.mea.gov.in/Portal/ForeignRelation/ECUADOR_Dec2014.pdf. India-Ecuador Relations, Ministry of External Affairs, Government of India, https://www.mea.gov.in/Portal/ForeignRelation/ECUADOR_Dec2014.pdf. In 2006, the bilateral trade between India and Brazil was US$ 2000 million (one million dollar each), in India-Brazil Relations, Ministry of External Affairs, Government of India, https://www.mea.gov.in/Portal/ForeignRelation/Brazil_ August_2014.pdf. India-Brazil Relations, Ministry of External Affairs, Government of India, https://www.mea.gov.in/Portal/ForeignRelation/Brazil_August_2014.pdf.

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9.

10. 11.

12.

13. 14.

15. 16.

17.

18. 19.

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India-Brazil Relations, Ministry of External Affairs, Government of India, https://www.mea.gov.in/Portal/ForeignRelation/Bilateral_brief_Latest__ 1_pdf. MERCOSUR is a conglomeration of Brazil, Argentina, Paraguay and Uruguay which was formed in 1991. Dutch disease is the causal relationship between the increase in the growth of a specific sector such as natural resources and a decline in other sectors such as manufacturing or agriculture. As inflows of foreign revenues increase in the concerned the growing sector, the country’s currency becomes stronger compared to currencies of other nations. As a consequence, the nation’s other exports become more expensive for other countries to purchase and those sectors turn less competitive, and imports become cheaper. This model was best developed by the two prominent economists W. Max Corden and J. Peter Neary in 1982. Bolivarian revolution was a political process in Venezuela which was led by Hugo Chavez, the founder of the Fifth Republic Movement and later the United Socialist Party of Venezuela (PSUV). In fact, the Bolivarian Revolution is named after Simon Bolivar, an early nineteenth-century Venezuelan and the Latin American revolutionary leader who was prominent in the Spanish American Wars of Independence in achieving the independence of most of the northern South American colonies from the Spanish rule. According to Chávez and his supporters, the Bolivarian Revolution sought to build an inter-American coalition to fight against neo-colonialism, and execute nationalism and establish state-led economies. Because of the persistent effort and push of Venezuela, the crude oil price increased from 35 dollar in 2000 to 100 in 2006–07, in Trinkunas [21, p. 181]. The new currency Bolívar Soberano as issued by the Venezuela government on 20th August 2018 in an attempt to bolster its crumbling economy since the IMF warned that inflation could hit one million percent that year, in Sterling [23]. Currently Nicolas Maduro leading the United Socialist Party of Venezuela (PSUV), which was established by in 2007. Coronel, Gustavo, ‘Corruption, Mismanagement, and Abuse of Power in Hugo Chávez’s Venezuela’, CATO Institute, https://www.cato.org/publications/dev elopment-policy-analysis/corruption-mismanagement-abuse-power-hugo-cha vezs-venezuela. Coronel, Gustavo, ‘Corruption, Mismanagement, and Abuse of Power in Hugo Chávez’s Venezuela’, CATO Institute, https://www.cato.org/publications/dev elopment-policy-analysis/corruption-mismanagement-abuse-power-hugo-cha vezs-venezuela. ‘Chávez in final push for UN security council seat’, The Guardian, https://www. theguardian.com/world/2006/oct/04/venezuela.unitednations. Between 1997 and 2003 Venezuela production went down to approximately 2.7 billion barrels a day and OPEC share from 12 to 10%, and the price of crude skyrocketed, reaching its highest level since the 1991 Gulf War, Kozloff [28, p. 24].

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20. Choudhary, Sanjeev, ‘Rupee payment for Venezuelan oil under consideration’, The Economic Times, https://economictimes.indiatimes.com/industry/energy/ oil-gas/rupee-payment-for-venezuelan-oil-under-consideration/articleshow/ 68455762.cms?from=mdr. 21. Venezuela is India’s fourth largest oil supplier after Iraq, Saudi Arabia and Iran. 22. Jaiswal, Aishani, ‘How does India factor in? Politics of oil amidst the Venezuela crisis’, https://www.orfonline.org/expert-speak/politics-oil-amidstvenezuela-crisis-53105/. 23. Verma, Nidhi and Varadhan, Sudarshan. ‘Venezuela’s PDVSA seeks to barter its oil with India’, Reuters, https://www.reuters.com/article/us-india-oil-venezu ela/venezuelas-PdVSA-seeks-to-barter-its-oil-with-india-idUSKCN1Q00XY. 24. Choudhary, Sanjeev. ‘Rupee payment for Venezuelan oil under consideration’, The Economic Times, https://economictimes.indiatimes.com/industry/energy/ oil-gas/rupee-payment-for-venezuelan-oil-under-consideration/articleshow/ 68455762.cms?from=mdr. 25. Choudhary, Sanjeev. ‘Rupee payment for Venezuelan oil under consideration’, The Economic Times, https://economictimes.indiatimes.com/industry/energy/ oil-gas/rupee-payment-for-venezuelan-oil-under-consideration/articleshow/ 68455762.cms?from=mdr. 26. Verma, Nidhi and Varadhan, Sudarshan. ‘Venezuela’s PDVSA seeks to barter its oil with India’, Reuters, https://www.reuters.com/article/us-india-oil-venezu ela/venezuelas-PdVSA-seeks-to-barter-its-oil-with-india-idUSKCN1Q00XY. 27. Chanda, R., Panja, Debasmita and Biswas, Swapneela, ‘India-Latin America Trade Relations’, http://tejas.iimb.ac.in/articles/102.php. 28. Kang, S. ‘The Influence of India’s Gaming Oil Resources in African on China and the Analysis of Countermeasure’, Macro-Economic Research, vol. 5, pp. 37–46. 29. SICA consists of seven full members: Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama; and Dominican Republic as the Associate Member. 30. CARICOM is a group of twenty developing countries in the Caribbean that have come together to form an economic and political community that works together to shape policies for the region and encourages economic growth and trade. 31. OAS consist of 35 independent countries of the Americas. 32. ‘Venkaiah’s visit to help boost India’s ties with South, Central America’, Livemint, https://www.livemint.com/Politics/ggc3tiGj4aU392lD5n7W6I/Ven kaiahs-visit-to-help-boost-Indias-ties-with-South-Cent.html. 33. India achieved Observer Status in Pacific Alliance in 2014, in Pant and Sharma [40].

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References 1. Heine, Jorge. 2012. Interview with Hon’ble Jorge Heine. FPRC Journal 11: 4–10. 2. Destradi, Sandra, and Eva Küssner. 2013. Go South! India “Discovers” Africa and Latin America. GIGA Focus, no. 4. 3. Desai, Ronak D. 2015. A New Era For India-Latin America Relations? June 25. https://www. forbes.com/sites/ronakdesai/2015/06/25/a-new-era-for-india-latin-america-relations/#a0370c 610e26. 4. The Financial Express. 2010. India-Latin America Trade Could Touch $30 bn by 2012, August 11, 2010. http://www.financialexpress.com/news/indialatin-america-trade-could-touch-30-bnby-2012/658685/1. Last accessed on August 3, 2011. 5. Bhojwani, Deepak. 2014. India and Latin America: Looking Ahead. India Quarterly 70(I). 6. International Energy Agency. 2015. India Energy Outlook: World Energy Outlook Special Report. 7. ECLAC. 2011. India and Latin America and the Caribbean: Opportunities and Challenges in Trade and Investment Relations, 42. Chile: Santiago. 8. Platts. 2012. India’s Oct LNG Imports Edge Up from Sep, Jump 24% on Year to 1.24 Mil Mt, November 5, 2012. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/722 3058. 9. Shidore, Sarang. 2013. New Frontiers in South-South Engagement: Relationship between India and Latin America & Caribbean, 16–18. New Delhi: Indian Council of World Affairs. 10. Franco, Rose Anne. 2008. Venezuela: Energy, the Tool of Choice. In Energy and Development in South America: Conflict and Cooperation, ed. Cynthia J. Arnson, Claudio Fuentes, et al., pp 34–39. Washington, DC: Woodrow Wilson International Centre for Scholars. 11. Hongbo, Sun. 2012. China and India’s Oil Investment in Latin America: A Comparative Perspective. In Setting the Agenda: Asia and Latin America in the 21st Century, ed. Ariel C. Armony, 39–46. University of Miami, Centre for Latin American Studies. 12. The Oil & Gas Year. 2016. Boost in India-Colombia Relations, February 5, 2016. https://www. theoilandgasyear.com/articles/boost-in-india-colombia-relations/. 13. Zárate, Margarita Teresa Nieves, and Augusto Hernández Vidal. 2016. Colombia Energy Investment Report. Brussels: Energy Charter Secretariat. https://energycharter.org/…/20160729-Col ombia_Energy_Investment_Report.pdf. 14. Kallanish Energy. 2018. India Looks at Colombia, Ecuador for Heavy Crude, July 26, 2018. http://www.kallanishenergy.com/2018/07/26/india-looks-at-colombia-ecuador-forheavy-crude/. 15. Heine, Jorge, and R. Viswanathan. 2011. The Other BRIC in Latin America: India. Americas Quarterly, Spring. https://www.americasquarterly.org/india-latin-america. 16. de Oliveira, Adilson. 2010. Energy Security in South America: The Role of Brazil. Winnipeg, Manitoba, Canada: International Institute of Sustainable Development. https://www.iisd.org/ sites/default/files/…/energy_security_south_america.pdf. 17. Zaremba, Haley. 2018. Brazil’s Opposing Energy Views. oilprice.com, August 21. https://oil price.com/Alternative-Energy/Solar-Energy/Brazils-Opposing-Energy-Views.html. 18. Rao, Urmila, and Manish Vaid. 2016. BRICS and the Doctrine of Energy Cooperation Modern Diplomacy, October 24, 2016. https://moderndiplomacy.eu/2016/10/24/brics-and-thedoctrine-of-energy-cooperation/. 19. Viswanathan, R. 2017. Why It’s Important for India to Trade with Latin America. The WIRE, July 21. https://thewire.in/diplomacy/trade-india-latin-america. 20. Kiger, Patrick J. 2019. How Venezuela Fell From the Richest Country in South America into Crisis. History, May 9. https://www.history.com/news/venezuela-chavez-maduro-crisis. 21. Trinkunas, Harold A. 2009. Energy Security: The Case of Venezuela. In Energy Security and Global Politics: The Militarization of Resource Management, ed. Daniel Moran, and James A. Russel. London: Routledge. 22. Rapier, Robert. 2017a. How Venezuela Ruined Its Oil Industry. Forbes, May 3. https://www. forbes.com/sites/rrapier/2017/05/07/how-venezuela-ruined-its-oil-industry/#43ce95207399.

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23. Sterling, Joe. 2018. Venezuela Issues New Currency, Amid Hyperinflation and Social Turmoil. CNN, August 23, 2018. https://edition.cnn.com/2018/08/20/americas/venezuela-cur rency/index.html. 24. Smith, Geri. 2005. Is Venezuela’s Chavez Killing the Golden Goose? Business Week, March 14. http://www.businessweek.com/magazine/content/05_11/b3924086_mz058.htm. 25. Collier, Robert. 2006. Chavez’s Anti-U.S. Fervor, Emerging Force among Nonaligned Nations. SFGATE, September 21. https://www.sfgate.com/politics/article/CHAVEZ-S-ANTIU-S-FERVOR-Emerging-force-among-2469367.php. 26. Barletta, Michael and Harold Trinkunas. 2004. Regime Type and Regional Security in Latin America: Towards a ‘Balance of Identity’ Theory. In Balance of Power: Theory and Practice in the 21st Century, ed. T.V. Paul, James J. Wirtz, and Michael Fortmann, 334–359. Stanford: Stanford University Press. 27. Rapier, Robert. 2017b. How Venezuela Ruined Its Oil Industry, May 7. https://www.forbes. com/sites/rrapier/2017/05/07/how-venezuela-ruined-its-oil-industry/#2ec7eaf67399. 28. Kozloff, Nikolas. 2006. Hugo Chavez: Oil, Politics, and the Challenge to the US. New York: Palgrave Mcmillan. 29. Palast, Creg. 2002. OPEC Chief Warned Venezuela about Coup. The Guardian, 13 May. http:// www.guardian.co.uk/oil/story/01131971450400.html. 30. DePersio, Greg. 2019. How Does the Price of Oil Affect Venezuela’s Economy?, June 25. https://www.investopedia.com/ask/answers/032515/how-does-price-oil-affect-ven ezuelas-economy.asp. 31. Reuters. 2019. Venezuela Turns to India for Oil Exports as US Sanctions Bite. The Business Line, February 13. https://www.thehindubusinessline.com/economy/venezuela-turns-to-indiafor-oil-exports-as-us-sanctions-bite/article26258740.ece#. 32. Dadwal, Shebonti Ray, and Chithra Purushothaman. 2019. US-Venezuela Stand-Off: Impact on Global Oil Prices, February 20. https://idsa.in/idsacomments/us-venezuela-stand-off-dad wal-purushothaman-200219. 33. Ross, Michael L. 2012. The Oil Curse: How Petroleum Wealth Shapes the Development of Nations, 174. Princeton: Princeton University Press. 34. The Hindu. 2012. Argentina Seeks Indian Support in Territorial Claim, February 24. 35. Mercopress. 2012. Indian Oil and Gas Company Desists from Falklands’ Exploration Partnership, May 16. http://en.mercopress.com/2012/05/16/indian-oil-and-gas-company-desistsfromfalklands-exploration-partnership. Accessed December 19, 2012. 36. Reserve Bank of India. 2013. Reserve-Bank-ofIndia-Bulletin-LXVI, February 12. http://rbi docs.rbi.org.in/rdocs/Bulletin/PDFs/0DBUL101212_ FL.pdf. 37. Ministry of External Affairs, Government of India. 2012. JointStatement-on-the-First-IndiaCELAC-Troika-ForeignMinisters-Meeting. www.mea.gov.in/bilateral-documents.htm?dtl/ 20306/Joint+Stateme nt+on+the+First+IndiaCELAC+Troika+Foreign+Ministers+Meeting. 38. Prasad, Binay. 2017. India’s Missed Opportunity in Latin America. The Diplomat, June 21. https://thediplomat.com/2017/06/indias-missed-opportunity-in-latin-america/. 39. Jacob, Jayanth. 2018. India Looks to Boost Ties with Latin America. The Hindustan Times, June 18. https://www.hindustantimes.com/india-news/india-looks-to-boost-ties-with-latin-america/ story-jbp9eJQB0SVXQgD6hCSxUK.html. 40. Pant, Harsh V., and Yamini Sharma. 2017. India and Latin America: Where Ignorance is Not Bliss. ORF Issue Brief . Observer Research Foundation, September 12, no. 197. https://www. orfonline.org/research/india-and-latin-america-where-ignorance-is-not-bliss/. 41. Ministry of External Affairs. 2014. Prime Minister Narendra Modi’s Statement at the Plenary Session of the 6th BRICS Summit. Inclusive Growth: Sustainable Solutions, July 15. http:// mea.gov.in/Speeches-Statements.htm?dtl/23636.

Chapter 6

Other Regions: Opportunities with Complexities

This chapter covers oil and natural gas energy of the two regions—the Arctic and the South China Sea. The Arctic energy part (Arctic Energy—A New Frontier of Risk) includes energy potentials in Arctic Ocean and its littoral areas that include explored, discovered and undiscovered oil and natural gas resources. However, there is no easy inroad to access the resources due to frozen topography, expensiveness in the drilling and transportation process, environmental challenges emanated or expected from oil spill, and consequent disturbances over the aquatic and non-aquatic living species and habitats there. Further, the territorial disputes among the littoral countries have led to militarization of the region and consequent “New Great Game”, and the Arctic melting has generated the hope for opening of Northeast and Northwest Passage. Under these circumstances, India, independently, and along with littoral countries, trying to have its sizeable presence and role in the Arctic energy market, geopolitical developments and prospective sea lane security. The South China Sea part (South China Sea—Drilling in the Troubled Waters) deals will the existing oil and natural gas potentials in the South China Sea region, territorial disputes by the littoral countries where China claims that the whole sea belongs to it, which is not acceptable by the other littoral countries. So, a country-specific conflict approach and intricacies of international maritime law are analysed. Insecurity of oil exploration and sea lane security has been explained through territorial claims and counter claims, and other related issues. Further, India’s oil import and investment in this region are well explained with the challenges.

6.1 Arctic Energy—A New Frontier of Risk The Arctic or Arctic Ocean today is poised as one of the final frontiers of hydrocarbon energy. According to an assessment conducted by the U.S. Geological Survey (USGS) and U.S. Energy Information Administration (EIA, 2012), the Arctic holds about 30% of its undiscovered conventional natural gas resources and 13% (90 billion © Springer Nature Singapore Pte Ltd. 2020 S. K. Pradhan, India’s Quest for Energy Through Oil and Natural Gas, https://doi.org/10.1007/978-981-15-5220-5_6

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barrels) of the world’s undiscovered conventional oil resources. In another estimate, it is found that the region holds an estimated 22% of Earth’s oil and natural gas resource, and the eight Arctic basins which have significant oil and natural gas reserves include Amerasia Basin, Arctic Alaska Basin, East Barents Basin, East Greenland Basin, West Greenland East Canada Basin, East Greenland Rift Basin, West Siberian Basin and the Yenisei-Khatanga Basin. These eight provinces account for about 360 billion barrels oil equivalent or over 87% of the total undiscovered Arctic area resource. The climate change and melting of ice along with vast stretch of sedimentary basins and continental shelves have created opportunities for harnessing of natural resources, industrialization and scramble for the region’s energy resources. Moreover, increasing disturbances and insecurity in West Asia are expected to lead to a large number of countries looking for the Arctic resources. For the USA, the Beaufort Sea reserves oil enough for one year of American consumption, adding the Chukchi Sea, which is farther from the North Slope, possibly would add another two years. But a more appropriate perspective is that the production from a well typically spans 20–30 years. This would imply an average production of about 320 million barrels per year from the Beaufort Sea, or five percent of annual US consumption [1]. Russia, which is investing tens of billions of dollars in its northern infrastructures in the Arctic, is another most prominent player in the region. According to some estimates, 43 of the 60 major oil fields in the Arctic are in Russia [2]. For the last decades, shipping throughout the Arctic is taking on an unprecedented importance as the ice recedes, and the Kremlin has a plan for taking advantage of this changing geography. Russia wants the Northern Sea Route, where traffic jumped from four vessels in 2010 to 71 in 2013, to eventually rival the Suez Canal as a passage between Europe and Asia. Significantly, the Northern Sea Route from Europe to Asia takes 35 days, compared to a 48-day journey between these two continents, through the Suez Canal. In 2013, Russia established its Prirazlomnaya project, the world’s first stationary oil-drilling platform in the Arctic Ocean [3]. The Northeast Passage, mainly along Canada’s Arctic Coast, will link Far East Asia with North America, while the Northeast Passage, mainly along Russia’s Arctic shoreline, would provide an alternate route between Asia and North America, and between Europe and Asia. These Arctic routes will cut global shipping routes by several thousand kilometres. For example, the Arctic route from Rotterdam (Holland) to San Francisco will be 4000 km shorter than the existing route [4]. Outside of the USA and Russia, there is another country also with a similarly impressive track record in finding and developing Arctic and near-Arctic oil and gas resources without using a commandand-control approach. That country is Norway. Coincident with the settlement of outstanding disputes, Norway has achieved a string of recent successes in Arctic and near-Arctic exploration [5]. China, which is a far away country, is posing itself as “Near-Arctic” country; India, in association with Russia, has showed its interest in the Arctic exploration, and already the country has its presence in the region through IndARC, the country’s first underwater moored observatory in the Kongsfjorden fjord, half way between Norway and the North Pole. Countries like U.K., France, the Netherlands, Poland, Italy, Brazil, China, Japan and South Korea have also expressed an interest in becoming permanent members of the Arctic Council. Companies like

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BP, Total, Shell, Statoil, ExxonMobil and Rosneft have their presence in exploring the resources.

6.1.1 Drilling Challenges Energy exploration in Arctic has two major implications, which can be explained through difficulty and risk involved in the form of drilling activities. Drilling in the Arctic is a significant challenge and some of the problems general in nature include: first, alongside the logistical nightmare of operating in such a hostile and remote region, oil rigs face an ever-present risk from huge icebergs and have to employ fleets of ships to drag them out of the way. Some of the icebergs are so big that the oil rigs are forced to stop drilling. Second, the Arctic drilling season is limited to a narrow window of a few months, i.e. during the summer. In this short period of time, a huge logistical response is required to cap a leaking well; yet, there is a least possibility of capping the leakage. Further, the successful drilling of vital relief wells, crucial to permanently capping a ruptured well, could not be guaranteed before the winter ice returns. Third, in the context of natural gas, it is much more difficult to transport to market. It has a much lower energy density and must be supercooled to liquid level for movement by sea. This requires a large, complex and expensive facility that takes several years to design, permit and build. Pipeline construction for natural gas encounters the same expenses and problems as those required to transport oil. Offshore exploration in the Arctic currently targets oil instead of natural gas because of relative easiness of transport. But the recent problem in oil pipelines can be cited to the Trans-Alaska pipeline, which is operating at about one-third capacity because of declining production of Prudhoe Bay—at a rate of about five to six percent per year and this is largely because the oil freeze. Hence, pipeline seems uneconomic. Apart from these, there are specific problems that hinder the exploration and transport facilities in the Arctic. First, equipments for the oil and natural gas exploration and transportation are not designed adequately to withstand the frigid temperatures. Second, harsh winter weather, which requires the equipment to be specially designed to withstand the frigid temperatures. Third, on Arctic lands, poor soil conditions require additional site preparation to prevent equipment and structures from sinking. Fourth, the marshy Arctic tundra can preclude exploration activities during the warm months of the year. Fifth, in Arctic seas, the icepack can damage offshore facilities, while hindering the shipment of personnel, materials, equipment and oil for long time periods. Sixth, limited transportation access and long supply lines reduce the transportation options and thus increase of transportation costs. Seventh, higher wages and salaries are required to induce personnel to work in the isolated and inhospitable conditions. Eighth, long supply lines and limited transportation access from the world’s manufacturing centres require equipment redundancy and a larger inventory of spare parts to ensure reliability, while increasing transportation costs. Ninth, natural gas hydrates can pose operational problems for drilling wells in both onshore and offshore Arctic areas. Tenth, more to

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mention, it is estimated that the costs for the development of onshore oil and natural gas projects in Arctic are more than the similar projects undertaken in other parts of the world, and producing oil in the arctic harsh environment requires the price of the oil to be around $100 a barrel to be remunerative [6].

6.1.2 Exploration Implications on Environment The unique flora and fauna in Arctic include species such as tundra vegetation, caribou, polar bears, seals, whales and other sea life. It houses a diverse range of unique wildlife: hundreds of species of seabirds, millions of migrating birds, 17 different species of whale Experts believe that 90% of the world’s Narwhal population can be found in Baffin Bay alone. Mammals including Polar Bears, Arctic foxes and various species of seal live in Arctic at different points throughout the year. The Arctic is also home to four million people, many of whom are descendants of Indigenous communities who have lived in the Far North for thousands of years. But, oil or natural gas drilling poses a much broader environmental impact in the region. Every barrel of oil removed from the Arctic Ocean will presumably be burned, releasing carbon dioxide that will spend centuries trapping solar heat in the atmosphere. Burning the Arctic Ocean’s oil could release an additional 15.8 billion tonnes of CO2 into the atmosphere, which is equivalent to all U.S. transportation emissions over a nine-year period. It would raise global CO2 levels by 7.44 parts per million (ppm), nearly 10% of the global rise in atmospheric CO2 over the past 50 years [7]. The acoustic and temperature disturbance of marine animals because of oil exploration is of a particular concern as the underwater noise can affect communication, migration, feeding, mating, reproduction and other important functions of the aquatic animals such as whales, seals and walrus and displace of populations from their essential habitat areas. For the local indigenous people, if the aquatic animals and living plants are affected adversely, their way of life will get affected, and the people who have been there for thousands of years will be deprived of their food and livelihood that may lead to their extinction. For the local Eskimo communities whose culture and livelihood depend on a thriving Arctic are subjected to the debate of survival today [8]. Hence, the Arctic is so delicate and the system is so sensitive. Further, the Arctic Ocean which has low temperatures and limited sunlight is making an oil spill more likely to faster—as seen after the Exxon Valdez spill in 1989. A large spill undoubtedly causes extensive acute mortality in plankton, fish, birds and marine mammals in the Arctic Ocean. In the Arctic´s freezing conditions, oil is known to behave very differently than in lower latitudes. It takes much longer to disperse in cold water, and experts suggest that there is no way to contain or clean up oil trapped underneath large bodies of ice. Toxic traces would linger for a longer period, affecting local wildlife for longer, be transported large distances by ice floes and leave a lasting stain on this pristine environment. According to Boxall, the Arctic climate means an oil spill in the Far North that could be much harder to clean up than the Deepwater Horizon spill in the Gulf of Mexico. In the

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fairly temperate climates, bacteria take over, and they clean up what we leave behind. But, in the Arctic, things are very different since it is much colder first of all and which means that the whole process takes much longer since the growth of bacteria is slow. The closest examples of oil spill could be traced to the Northern Extremes, where the Exxon Valdez tanker spill in Alaska. Even after two and half decades later, the region is still suffering the after-effects, with local populations of otters being severely harmed, orcas yet to recover, and spilled oil remaining in areas on land. The impact of a blowout on the Arctic seabed could be far more significant for the waters of the High North. Likewise, the British Petroleum’s response to the Gulf of Mexico oil spill witnessed, how company needed over 6000 ships, more than 50,000 people and a massive cheque book to cap its leaking well, and even then it did not manage it for months, causing the biggest environmental disaster in US history. If big companies cannot adequately respond to a spill in temperate conditions near to large population centres and with the best response resources available, how can it be assured by claims that they are prepared to deal with a spill in the extreme Arctic environment? A top US Coast Guard’s official recently admitted that they currently have “zero” spill response capability in the Arctic. There are arguments and cross-arguments over the effectiveness of oil spilling effect. The oil companies try to convince the world community that they have the technology to prevent a spill, and that even if occurs, they have the technology to plug the leak and collect the oil. The Shell company has claimed it could clean up 95% of a possible spill in the Beaufort. But, the U.S. Geological Survey thinks only 1–20% could be recovered from an Arctic spill. Cairn’s oil spill response plan, eventually made public after months of pressure from Greenpeace but according to oil spill expert Rick Steiner the response plan was inadequate. The so-called solutions like transporting blocks of contaminated ice to warehouses and letting them melt to recover the oil or the claims that the fishes are capable to swim away from oil leakage or oil spill seem outlandish and unrealistic. While Greenpeace continues its fight against the oil companies and their policies on Arctic exploration, there are some limitations to their effort. The Shell company has found support from the Obama administration, which allowed Shell to drill 1400 feet below the surface of the Chuckchi Sea and Beaufort Sea and accepted its response plan against accident or oil spill in Chuckchi Sea. In the same manner, the US federal court refused to accept arguments that the company was not prepared for a big oil spill in such a harsh and remote climate [9]. However, there are criticisms on the oil companies about their Action Plan, mechanism for prevention and resolution such as capping, containment, deflection barriers and cleanup plans on the grounds of high volatility of ice and on-shore topography. According to Simon Boxall from the University of Southampton, “Arctic drilling does not have the technology to clean up a spill”. “Companies will say that it won’t happen, we’ve got so many fail-safes these days that it’s a perfectly safe operation. But there’s no such thing as a fail-safe. And there will be a spill in the Arctic. And as with the Gulf of Mexico it’ll probably be fumbling in the dark a bit, dealing with it as it happens”. More to mention, the underground spill is the spill, when it happens, whether it is from a tanker or whether it is from a drill operation, if it is close to the ice edge, will go under the ice and there is

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no adequate research and experience with a spill that goes beneath the iceberg. Spills among ice floes can be much more difficult to contain and clean up than spills in open waters, and there are no strict legal requirements for fully assessing the risks, an approach that companies drilling, for instance in Norwegian waters, must follow [1]. However, in some quarters of the companies, the oil industries have demonstrated that they are not prepared adequately to deal with the risks and consequences of drilling in the Arctic. As the World Wildlife Fund points out, “there is no proven effective method for containing and cleaning up an oil spill in icy water” [7]. One senior official from a Canadian firm, specialized in oil spill response, openly stated that: “There is really no solution or method today that we are aware of that can actually recover [spilled] oil from the Arctic”.

6.1.3 Geostrategic Competitions and Security There has a been a fierce competition among the five Arctic states, namely Norway, Denmark (Greenland), Russia, Canada and the USA with each claiming rights not only to resources in their Exclusive Economic Zone (EEZ) of 200 nautical miles but also extending their territorial rights so as to expand its geopolitical influence and exploit the natural resources available there. Although it is questionable that the Arctic’s oil and natural gas resources will contribute to the international energy market till 2025, yet it makes an economic sense to continue research and exploration of energy resources in this region [10]. Because of the Arctic’s existing and possible potential resource bases, trade impact and ongoing territorial claims, the countries are striding up for military preparations in this region. During the summer period, the Arctic routes have already been used for commercial shipping, and gradually, the density of number of cargoes is increasing. Thus, the promising natural resources have intensified economic importance of Arctic and geopolitical significance of the littoral countries. Overlapping and disputed claims of economic sovereignty between or among the neighbouring jurisdictions hinder the development of Arctic resources. It is evident that the Arctic Ocean is surrounded by eight countries of Canada, Denmark (Greenland), Finland, Iceland, Norway, Russia, Sweden and the USA. Under the existing international law, the countries have an exclusive right to seabed resources up to 200 miles beyond their coast that is called EEZ. Beyond the EEZ, an assessment of “natural prolongation” of the continental shelf may influence concerned countries’ seabed boundaries. All the littoral countries have a jurisdictional claim to the portions of the Arctic seafloor. Their claims to oil and natural gas beneath the Arctic Ocean seafloor have historically been determined by unilateral decrees, although the United Nations Convention for the Law of the Sea (UNCLOS) provides each country an EEZ extending 200 miles out from its shoreline. However, under certain conditions (natural prolongation), the exclusive economic zone can be extended up to miles, provided a nation demonstrate that its continental margin extends beyond 200 miles from its shore. But, on the other way, this “natural prolongation” of the continental self has affected countries’ seabed boundaries of other countries. This provision has

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led to some overlapping territorial disputes and disagreements over how the edge of the continental margin is defined and mapped. Although Russia, Canada and the USA are currently working to define the extent of their continental margin, Russia claims that its continental margin follows the Lomonosov Ridge all the way to the North Pole, while both the USA and Canada claim a portion of the Beaufort Sea. The legal battle, so far, is ongoing so as to justify their claims. In 2014, Denmark, along with Greenland, filed a petition to the UN Commission on the Limits of the Continental Shelf (UNCLCS), claiming ownership of about 895,541 km2 . of the Arctic seabed that constitutes an area 20 times larger than the country Denmark itself, and as a first country, it has claimed for an outright ownership on the North Pole [11]. Earlier, in 2001, Russia made an official submission to the UNCLCS, in accordance with the UNCLOS, claiming an extension of its territory beyond the 200 nautical miles EEZ, namely the Lomonosov Ridge and Mendeleev Ridge, with its claim that the Arctic Ocean seabed is a projection of the Siberian continental platform. After 13 years of wrangling, the UN Commission on the Limits of the Continental Shelf awarded Russian jurisdiction over a 20,000 square mile area in the Sea of Okhotsk. Yet, Putin wants as much as of the Arctic as he can get [12]. The increasing significance of the Northern Sea Route (NSR) is an obvious advantage for Russia. According to Dmitry Kobylkin, the Russian Minister of National Resources and Environment, “cargo shipping in the Russia’s northernmost territorial waters will exceed 80 million tons by 2024” [13]. Moscow claims that the NSR, the route for maritime transport, is situated within its EEZ, and thus, any vessel transporting through this route should take prior permission, and pay the transit fees. Accordingly, the ships are required to take a permit of 45 days in advance and accompanied by a Russian pilot to ensure the non-military nature of transport [14]. Moscow always perceives the Arctic region as an important strategic leverage and has striven to strengthen and retain its hold over it. However, its claims and role are disputed by the USA and some other countries which consider the NSR as a part of the international strait where every state has a right of free navigation. The growing rift and the emerging tensions between Russia and the West or the USA on the major global geopolitical issues complicate this matter further and thus militarization of the region. In 2014, Russian President Vladimir Putin declared a new military doctrine for the country. Accordingly, while focusing on the threat emanating from the expansion of North Atlantic Treaty Organization (NATO), Russia exerted the need for expansion of its influence in the Arctic region. Accordingly, Putin pronounced the formation of a “united system of naval bases for the ships and next-generation submarines in the Arctic” to defend Russia’s pivotal interest there. He also suggested the “strengthening of naval component of Federal Security Service (FSB)” [15] that is the principal security agency of Russia and successor of Committee of State Security (CSS) of erstwhile Soviet Union. In 2014, the Russian Defence Minister Sergei Shoigu announced that military units would be deployed all along its Arctic Coast— from Murmansk to Chukotka having a distance of 4700 km. The Alexander Nevsky, Vladimir Monomakh and Yuri Dolgorukiy submarines belonging to Russia’s new Borei-class nuclear fleet are designed to carry up to 20 Bulava nuclear missiles, with

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a range of 8000 km each that equates the distance between Moscow and Chicago, and these are the rare submarines which can operate from the icy Arctic. The Russian military establishments have already been stationed in Cape Schmidt in Russia’s Far East, Arctic Wrangel and Kotelny islands. It has also drawn the roadmap to construct several airfields, radar stations and airport at Cape Schmidt (Mys Shimdta) that reopened in 2015 because of melting of ice. Moscow has already reopened its northern Alakurtti military base near the Finnish border, and at the end of 2014, President Putin announced that Russia’s Arctic Command has become operational [16]. This landmark step indicated that Moscow has paid special attention to the Arctic strategy. Russia has reinvigorated its process of building naval operations on its Northern Coast, restoring Soviet era airfields and ports and marshalling naval assets. In 2013, Russian President Vladimir Putin instructed top military personnel to pay specific attention to the Arctic, saying Russia needed “every lever for the protection of its national security and vital interests there” [17]. The country has also inaugurated Northern Clover base that can station military arsenals and personnel. Russia is in an advantage in establishing military stations and military preparations in this region since the temperature here dips drastically for which advanced technologies and skill are required to which other countries hardly can afford substantially. For example, Russia has developed nuclear icebreaker ships—the technology of high innovation. However, Russia’s Arctic build-up has not gone unnoticed against its archcontender USA. In the opinion of Defence Secretary James Mattis in 2017, “It was not to the US advantage to leave any part of the world to others” [18]. Likewise, in the past, the Presidential Directive of America in 2009 explicitly stated that the USA had national security and homeland security interests in the Arctic and discussed a number of issues related to the Arctic, including maritime transportation, and economic issues like energy exploration. In May 2010, the Obama administration released a national security strategy document which stated that the USA had broad and basic interests in the Arctic region and sought to meet country’s national security requirements. The American Arctic Roadmap intends for naval security in the Arctic, development of operational experience in an Arctic environment and the bolstering of naval readiness and capabilities. The American Navy has accelerated its plan after noting that it is “inadequately prepared to conduct a sustained maritime operation in the Arctic” [19]. Like Russia and the USA, in 2014, the NATO conducted its military exercise with more than 16,000 troops from 15 participating members. Norway has been conducting “Operation Cold Response” in its parts of territory, and moving troops and equipments to the region, shifted its Coast Guard headquarters northward and established its largest active army unit in the region. Canada, which has made overlapping claims in the North Pole and reiterating its sovereignty over the major portions of the Arctic, has launched a “Sovereignty Operation”, well known as “Operation Nanook”, involving the naval manoeuvres to reiterate its Arctic strength [20]. Denmark has a new Arctic Command, while Canada—an aspiring Arctic superpower—making its presence felt by regularly dispatching naval fleets. While most

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of the experts reject the prospects for an armed aggression in the Arctic, yet the territorial disputes and competition for resources have primed the Arctic for a possible “New Cold War” or “Second Cold War” [11]. Since there are is no clear-cut and specific policies on the Arctic, the melting of ice and consequent emergence of islands have complicated the issues and tensions in this region. The 1.1 million square miles of open water north of EEZ—dubbed the Arctic Ocean “donut hole”—is considered as the high sea, therefore, beyond the Arctic states’ jurisdiction. Unlike other maritime areas in the earth, there is no clear-cut legal treaty governing the Arctic. The Arctic Council, made up of eight circumpolar countries such as Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the USA, merely oversees and coordinates policies of the member countries. The council has no regulatory power, and the countries use the council only to communicate policy and research of their respective countries that relate to Arctic, and each member state is free to pursue its own policies within their declared Arctic boundaries. Arctic exploration and activities and consequent melting of ice are hardly an agenda of the Arctic Council to pursue by the member countries. More to mention, there has been opposition from Arctic Council members, especially Norway, on the grounds that the entry of large countries in the Arctic Council will eventually lead to making Arctic a Global Commons and thus a declining role of the existing members and reduced interest of the littoral nations.

6.1.4 What Prospects for India? The Arctic region implies both opportunities and challenges for India. The melting of the polar ice, Arctic resource potentials and subsequent geopolitical developments there have far-reaching consequence for India’s energy quest, climate change concerns, Arctic maritime footprints and future course of actions in the Arctic Ocean region, in general, and Arctic Ocean, in particular. India’s policy of diversification and investment definitely includes Arctic region as a destinations of India’s energy quest. India does not have direct access to the resources in this region and thus looks for the littoral countries for their offer, cooperation and opportunity. India, in recent period, intends to be more active in the Arctic Circle. The former External Affairs Minister of India, Salman Khurshid, while visiting Ny Alesund with his Norwegian counterpart, Espen Barth Eide, in 2013, announced that India is in the process of increasing its presence in the Arctic and at Himadri, and investing an amount of $12 million in the next five years for its effective presences in the entire Arctic region. India has already established it Arctic research station Himadri at Spitsbergen, Svalbard, Norway, which was inaugurated in 2008, and which is located at the International Arctic Research base, Ny-Ålesund. India has spent $3 million on developing Himadri and plans to spend up to $15 million more to enhance its presence there [21]. India in its initial years has explained its interests in the region as scientific, unlike China, which have larger interests to dive into the region.

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In due course of time, Indian foreign policy has passed through dynamism. Since India is not a littoral country, India has looked more towards Russia, which has significant role on Arctic, for its larger interest in the region. However, healthy bilateral relations with the other members of the Arctic Council have to be shaped to an extent where greater support could be achieved in the form of access to resources, transportation routes and geopolitical developments. Geographically, Russia is best suited for exploration tie-ups. Half of the Arctic’s population is Russian origin or Russian ethnic identity, and the area accounts for 11% of Russia’s Gross Domestic Growth (GDP) and 20% of its exports. During President Putin’s visit to India in 2014, he stated that Russia was ready to export Liquified Natural Gas (LNG) to India with the involvement of Oil and Natural Gas Corporation (ONGC) in Arctic projects [22]. Hence, while India’s primary objective in the region appears to be more for scientific research, resourcessuch as energy play a substantial role in its interest in the region [23]. During BRICS summit in Goa in October 2016, New Delhi and Moscow stated their intent to expand cooperation in Arctic energy along with other resources sectors. This included 20 deals, including enhanced cooperation in Russia’s Vankor oil project, which is owned by Vankorneft, the Rosneft-controlled company which has been managing the Vankor oil field-located in Russia’s northern tundra to the west of Yenisei River [24]. Russia has already started its largest production of oil in the Arctic with its 40 wells to tap 530 million barrels of oil at the Prirazlomnaya oil field in the Pechora Sea and developing oil blocks in Kara Sea that has the potential reserves of 36 billion barrels, where India can be a strong contender [25]. The 2013 was a major diplomatic victory for India by managing to gain a seat in the Arctic Council as an Observer, along with China, Italy, Singapore, Japan and South Korea. Before being an Observer member, India appreciated the sovereign claims of the permanent members, so as to bid Observer status. However, this move of India has been criticized for not claiming Arctic as a “Global Commons”, as it claimed on Antarctica. While India has already claimed and recognized Antarctica as a “Global Commons”, reluctant to do so in the Arctic context because of its pressing national interests, and changing dynamics in the international relations. It is obvious that this approach of India may well define the future course of action between the permanent members and the Observers of the Arctic Council. Syed Akbarruddin, the official spokesperson of Ministry of External Affairs of India, issued a statement welcoming the Arctic Council Observer status, “affirming our commitment to underwrite our proven scientific expertise, especially in the polar research capabilities, to the works of the Arctic Council, and to support its very vital objectives”. This opportunity, in fact, will contribute what India expects from the region. But, with climate change being one of the top concerns of the Arctic Council, India may come under increasing pressure on environmental norms and emission limitations. Till date, India has been at odds with the European Union’s environmental regulations that ask developing countries to cut levels of greenhouse gases (GHG). Since most of the members of the Arctic Council are from Europe, New Delhi has already maintained that radical adherence to these demands is against its economic interests and will hurt its energy quest for oil and natural gas. However, India’s commitment for COP21 signs India’s positive move for better environmental

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norms and emissions reductions and its consequent integration with European nations and Arctic Council (AC). Within and outside the Arctic Council, India needs to capitalize the opportunities in the region and it has has a significant presence and role in the decision-making process on global ecology, political economy and geopolitical power structures. The Arctic Council and the region are not only defined itself in geographical terms and factored in geo-economic elements but also have several geopolitical implications for India. With the opening of the Northern Sea Route (NSR), which is referred as the “Arctic Golden Waterway”, the countries may avoid “Malacca Syndrome” where India has a strong presence and intervention capabilities in the Indian Ocean. This NSR can also make the transportation route short and ensure a rational pricing for the suppliers and buyers. Nevertheless, if the NSR is materialized, the European Commission in its Green Paper revealed that “India will play a bigger role in the competition over these natural resources, and will definitely exercise its influence on the region with its naval forces” [26], and this is congruence what the Indian policymakers have already claimed. Shyam Sharan, the former Chairman of the National Security Advisor Board of the National Security Council of India and the former Indian Foreign Secretary, argued that “developments in the Arctic Ocean will redraw India’s interest and geopolitical map of the world, and the emerging nations, in future, may place the Arctic region on their international agenda”. But, when asked if India was planning and acting to be a part of the “New Great Game”, Salman Khurshid, the former Minister of External Affairs of India, tactically avoided such confrontation, “India is interested in working with other nations so as to protect the region” [27]. However, there are concerns for New Delhi as well. The rise and importance of NSR may adversely affect the prominence of Indian Ocean and India in the ongoing “Asia-Pacific” trade that could lead to “Trans-Atlantic” route again [28].

6.2 South China Sea—Drilling in the Troubled Waters 6.2.1 Potential Conflicts and Security Aspects South China Sea (SCS), the longstanding major artery for international maritime transportation and movement, has acquired further significance in the recent period because of estimates that it possesses large reserves of energy resources. Although how extensive these reserves will quantify is still a matter of some inference since less exploration and drilling has been conducted in the region. The Ministry of Geology and Mineral Resources of China forecasts about 130 billion barrels of oil— an amount that is greater to the combined reserves of Latin America and Europe [29]. With an average sea depth of 1400 metres, the exploitation of these resources would be easy for offshore energy industries to go for greater depths. Significantly, the archipelago is surrounded by oil-producing areas, i.e. the East and West Natuna

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Basins of Indonesia, the Nam Con Son (Wan’an Bei) Basin of Vietnam, the Northwest Palawan (Nansha Trough) Basin of the Philippines, Northwest Sabah Basins and the productive offshore Sarawak (Malaysia), that ensures a vast stretch of oil and natural gas resources. This frontier region is expected to yield considerable reserves, the range that varies from 1 billion barrels to 225 billion barrels of oil equivalent. The seabed of Reed Bank of Kalayaan Island Group, where Philippines maintain a presence, is estimated to contain about 440 million barrels of oil and 3.4 tcf of natural gas and [30]. Hence, in the context of energy resources, the SCS islands are considered indispensable to the countries in the region and global energy supply. However, the SCS has long been a potential flash point of armed conflict for resources and geopolitics. The SCS islands dispute is a territorial dispute over the ownership of the South SCS islands, a group of islands located in the SCS. States staking claims to various islands are: People’s Republic of China, Philippines, Vietnam, Malaysia, Bruneiand Taiwan (Republic of China). All, except Brunei, have occupied some of the islands. China has effected occupation of seven islands plus smaller territories but claims ownership of 90% of the area. Vietnam has control over 40 islands, Philippines nine, Malaysia has five and Taiwan control one island. The group of islands is spread over about 164,093 square miles area covering Sabah in Malaysian Borneo and off the coasts of the Philippines. The genesis and extent of conflict can be traced back to five major developments which have occurred in the SCS: First, no one paid much attention to SCS islands until the 1960s when it was unfolded with the possibility of mineral wealth and oil deposits located in the around the waters as highlighted by National Geographic Channel. The satellite survey over the SCS also indicated the possibility of world class oil reserves. Second, since both the USA and Russia, in the post-Cold War era, gradually abridged their military presence in Asia and Asia-Pacific regions, the issues which were once suppressed or kept aside by the block powers resurfaced. Third, the Asia-Pacific region has the fastest growing economies in the world, and because of this, there has been a shift from Atlantic trade to Asia-Pacific trade and investment. Hence, the SCS gains much prominence today along with both discovered and undiscovered energy resources. Fourth, the SCS dispute became noticeable mainly after the modification of the Law of the Sea Conventions in the 1970s and the early 1980s. The newly defined and demarcated exclusive economic zones (EEZ) and territorial waters, many times, have been overlapping of EEZs in the SCS region. Under these conflicting circumstances, parties involved in the dispute have claimed the resources and territories of others. Although the littoral countries have conflicting claims to the islands and maritime areas in the SCS, yet China, Vietnam and the Philippines have been most aggressive with their larger claims. As a consequence, apart from other countries in the region, they have physically occupied some of the islands in the archipelago, justified their effective occupation and claiming the existing as well as newly emerged islands. However, all the claims were peaceful until the Chinese navy had a confrontation with an armed transport ship of Vietnam over the possession of Johnson Reef in 1988; the former’s naval force sank three Vietnamese supply ships, killed 72 and captured nine Vietnamese. Since then, Vietnam and China had been at loggerheads with each other. With an anti-China anger is rising following different bitter incidents

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of in recent past, Hanoi has accused Chinese ships for cutting the cables belonging to Vietnamese oil survey vessels off its central coast. It was well clarified when the Foreign Ministry spokeswoman Nguyen Phuong Nga of Vietnam said in a press briefing, “Chinese fishing boat supported by two patrol vessels have damaged the exploration cable of the seismic survey boat that has been operated by state-owned company PetroVietnam”. Reacting to the Beijing, she reiterated that the acts are “seriously violating Hanoi’s sovereign rights” and “completely premeditated”. This was the second such act which happened two weeks after the Chinese patrol boats cut the cable off Hanoi’s central coast. Vietnam indicated that both the incidents happened well within the 200 nautical miles guaranteed to Vietnam as EEZ by the international law [31]. More to mention, Vietnamese fishing vessels, many times, have been seized, and their crews have been detained for fishing in disputed waters. All these developments are most serious even after two countries in 1991 agreed to put their conflicting issues aside and build a good bilateral relationship. Before analysing China–Philippines conflict, it is pertinent to understand UN laws on seas. When a country claims the SCS islands, it also claims the waters with a 200 nautical mile EEZ radius around them. But China argues that there is no word “proximity” mentioned in the UNCLOS, so they insisted that they have claims on the SCS. But, the UNCLOS demarcation clearly speaks for a 200 nautical mile which is more explanatory than proximity. Proximity is just to say near but the measurement of 200 nautical miles from the base line more suffice the claims. Although China is a signatory to UNCLOS, yet Beijing is reluctant to apply the principles with Philippines. Since Philippines possess largest islands and strongest bases what the Philippines government says, “We owned the West Philippines Sea”, China has used the tools of shards of pottery and arcane of issues of international law to claim its “indisputable sovereignty” in their disputes. Taiwan, a claimant of China’s stake. China and Philippines had first clashed in 1995, where the Association of Southeast Asian Nations (ASEAN) stepped into calm the situation by proposing a peaceful solution to the dispute by having China-ASEAN agreement in 2002 that spoke for exercise of restraint by both China and Philippines, and stop occupying of new areas of their claims. Yet, since then, China has been flexing its military muscles against Philippines. In 2011, it forcefully captured Mischief Reef of Philippines for several days. Due to strong protest of Manila, China left a hut-like structure that Beijing had built. China had to retreat from two islands that the Philippines has been claiming, and this happened, when Manila protested against Beijing that it was trespassing. Most recently, there have been many standoffs between Philippines and Chinese naval forces over the disputed territorial waters. In January 2012, ships from each navy squared up over the Scarborough Shoal. Under the growing sense of insecurity, Philippines has invited the USA to its doorstep to which China has objected. For Beijing, joint cooperation and American presence in the region are outside intervention and threat to its geopolitical interests and geostrategic positions. However, Washington’s argument, somehow, is different. According to American policymakers, joint naval exercises planned with the Philippines are “routine”, and such exercises that happen near the disputed Scarborough Shoal are purely a coincidence. Further to mention, although Philippines is planning to seek bids from foreign investors to jointly explore

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oil and natural gas resources in the areas of Reed Bank (Recto Bank), along with Palawan Islands, yet it is one of the disputed territories, being claimed by China and six other countries including Taiwan. Earlier China and Taiwan asked the Philippines to stop the conduct of planned exploration, claiming that the area is under Chinese jurisdiction. However, Philippines Secretary of Energy, Jose Almendras, refuted the claim, “Philippines has proceeded to invite foreign investors in the planned exploration and would start awarding contracts starting very soon” [32]. The recent judgment of Hague tribunal on bilateral conflict between China and Philippines went in favour of Philippines, yet China outrightly rejected the decision since the Judgment has been accrued from UNCLOS, to which Beijing has objections. Taiwan is also claimant to the islands and territories here, and in some occasions, its claims are coinciding with Chinese stakes. In the context of Taiwan’s claims, the dispute goes back to 1947, when the Chiang Kai-shek issued a map with 11 dashes— marking as almost 1.3 million-square-mile waterway of the entire SCS. However, the Communist Party of Mao Tse Tung toppled Chiang Kai-Shek government in 1949 but continued with his map and claims, although it trimmed a couple of dashes with “nine dash line”. Beijing’s argument is that historically, the disputed islands, rocks and reef have always been Chinese; therefore, they form the boundary from which 200 territorial waters should be measured. Taiwan government still holds its earlier claims and occupied the largest island of Taiping. It has disputes specifically with Philippines. According to Tien Chung-kwang, the Director General of the Taiwanese Department of East Asian and Pacific Affairs, “The SCS is our undisputed territory, and we reject any outside claim or occupation by any means” [33]. Nevertheless, conflicts between Taiwan and China are not consistent, as it happens between China and other countries. The People’s Republic of China has assertively pressed its territorial claims and regularly conducting naval manoeuvres in the troubles waters. Throughout the 1970s and 1980s and till date, China has been using fishing fleets, “oceanographic” vessels, sending high-ranking naval officials and civilian personnel on cruise to the disputed areas, and constructed blockhouses, airfields and other facilities in the SCS so as to have Beijing’s formidable presence and leverage in the region [34]. Since China is the third-largest consumer and importer of energy in the world, its 5.46 million barrels of oil consumption a day brings the Asian driver closer to the SCS. This is also in congruence to declining output of onshore oil reserves in China and promising offshore reserves. According to an estimate of BP Statistical Review of World Energy, 2011, China is desperate for new sources to boost its proven energy reserves. In January 2011, China’s Minister of Land and Resources in Beijing told to the People’s Daily that the Chinese geologists had found 38 oil and natural gas fields in SCS and would start drilling them. In 2011, China National Offshore Oil Corp. (CNOOC) launched a $1 billion oil rig from Shanghai, and the drilling projected to move southward directions and into the waters rich in oil and natural gas. So Beijing views SCS energy as not only an arena for nationalist flag-waving but also an indispensable opportunity to boost energy prospects for China. Beijing’s pressing demand for energy expected to be served by a bountiful supply of oil and natural gas at its doorstep. However, military strength in the disputed parts has prompted Beijing for new security map in the region. Accordingly, China Maritime Surveillance has

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been in charge of security over the vast stretch of sea that China claims. The agency has 300 vessels and 10 aircrafts to strengthen the fleet. In May 2011, it announced that it was going to raise the number of military personnel by 10,000 and purchase 36 new and advanced ships over the next five years. The large reserves of oil and natural gas have necessitated in intensification of a situation that propelled Chinese claims in SCS. In 1992, both China and Vietnam allowed oil exploration contracts to USA in the overlapping areas. China National Offshore Oil Corporation (CNOOC) and Crestone Energy, an American company, signed a cooperation contract for the joint exploration of the Wan’an Bei-21 block that is a 25,155 km2 section of the southwestern part of South China Sea. But, a part of the Crestone’s contract included Vietnam-claimed blocks 133 and 134. Interestingly, on these two blocks, PetroVietnam, ConocoPhillips Vietnam Exploration and Production (a unit of ConocoPhillips) and PetroStar Energy(USA), had agreed to evaluate the prospects of the blocks in April 1992. This led to a confrontation between Beijing and Hanoi, each demanded that the other cancel its contract. In 2011, the Philippines’s Department of Energy stated that a UK-based Forum Energy had completed a seismic survey and research for the Reed Bank exploration, which is in proximity of disputed islands. Philippines followed up the announcement with plans for a possible drilling in the region. But, when asked about Beijing’s reaction, Jiang Yu, China’s Foreign Ministry spokeswoman said, China holds undisputed sovereignty over the Nansha islands (SCS islands) and the adjacent sea waters. Therefore, any act by the countries or the companies to explore and invest in the oil and natural gas assets in the claimed sea waters of Chinese jurisdiction without the permission of the Chinese government will lead to a violation of China’s sovereignty and thus will be illegal and violation of sovereign rights. However, tactically, neither she made any specific reference to the Philippines Act or Forum Energy, nor explicitly rejected their deal. Significant to note, the Reed Bank Basin alone is thought to contain some 440 million bbl oil equivalent. However, the Chinese Foreign Ministry spokeswoman Jiang Yu categorically said, “China enjoys an indisputable sovereign right over the SCS islands and their adjacent waters”. To resolve the tension in 2002, a 10-member Association of Southeast Asian Nations and the People’s Republic of China signed an optional accord that called for maintaining the status quo. Accordingly, the Declaration on the Conduct of Parties (DOC) was signed to resolve the territorial disputes by a peaceful means, and in accordance with international law, based on UNCLOS. The agreement, however, has little teeth since China wants to engage claimants individually instead of a group. In 2009, Chinese government intended to bolster its naval presence in the SCS by sending six more patrol vessels in the next three to five years. Although the official reason was to curb illegal fishing yet the announcement came after intense tensions erupted between China and Philippines. In 2010, China stepped up its activities in SCS and resource explorations and warned British Petroleum and Exxon Mobile to stop exploring oil and natural gas resources in the offshore areas near to Vietnam coast. Hence, exploration guarantee and sea lane security have cropped in the disputed water mass. The sea lanes in SCS are essentially the transportation routes for ships and cargos. As per the United Nations Convention on the Law of the Seas, all ships are given the

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right to conduct an innocent passage such as unarmed, and no unloading of goods or people of their ships on others territorial seabeds (Part II, section 3, Subsection A, Articles 17–19). This means that ships are allowed to pass within 200 nautical miles from the coast of a country provided they are not a threat to the national security of the concerned country. However, the tankers or ships that carry hazardous substances or materials may be directed to use specialized sea lanes so as to conduct their passage through a country’s territorial water boundary (Part II, section 3, Subsection A, Articles 22–23). However, the laws regarding the passage through the straits require the demarcation, i.e. whether the straits are connected to landmass of the same country. If they are connected, the ships have to take the permission of transit passage. The principles of innocent passage also apply to the passage of ships through the straits. The rules here applied include specific cases where these transportation routes may be redirected or blocked according to the goods the ships contain. All these laws of United Nations offer the countries an added advantage who owns the islands or territorial seabed, whereas the nations who depend on these sea lanes for the delivery of goods have limited role or no control over the sea lanes and supply of goods. Because of these reasons, the country that claims territorial ownership over the SCS islands also expected to gain control of most of the areas of SCS since its territorial seabeds would extend from the islands’ coastline, not from their mainland coastline. By controlling sea lanes in this area, the country concerned would be able to increase its territorial security by stationing merchant ships, block potential threats, or even divert the delivery of goods, and building naval bases in its territory. The claim for islands in SCS means the control world’s pivotal shipping lanes. The SCS islands are about 1700 miles from the Strait of Malacca, one of the world’s most busiest shipping lanes, and everyday about 200 merchant vessels, including ships that carry 80% of Japan’s oil, passes through the waters of this region. Like Japan, South Korea and Taiwan heavily depend on this maritime route for the transportation petroleum and petroleum products. The overall traffic through this water mass is about three times larger than the Suez Canal, five times more than the Panama Canal, and a twenty-five percent of the world’s crude oil and LNG passes through this region. From the military and strategic point of view, the SCS area is the major sea lane connecting the west Pacific Ocean to the Strait of Malacca and finally to the Indian Ocean, and vice versa.

6.2.2 New Delhi’s Stakes If India’s interest and role peeped up in the resource-rich South China Sea, energy and sea lane security definitely shape India’s economic interest, and both India and Southeast Asian nations are working to fine-tune their bilateral balancing act. But, in the process, there are challenges to reach the deeper pockets of the region and no easy ride over oil and gas resources. Beijing has warned oil companies and Asian neighbours to stop searching for oil resources. However, ironically, in the same geographical region, China has invited countries and companies to explore there. But,

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in reality, China has not started drilling in the contested regions. Wu Shicun, president of the government-run National Institute of South China, while referring to joint exploration project by ONGC and a Vietnamese oil company in SCS, warned, “India will pay a heavy price for exploring oil in the disputed areas of SCS”. Coincidentally, it came a day after China lost political ground at the ASEAN Summit that ended in Cambodia where Beijing failed to keep SCS dispute out of discussion in the forum. Nevertheless, there are a lot of political and security risks for the Indian oil companies. About 40% of the area in the two offshore blocks under exploration by the OVL falls in the disputed zone as claimed by China. It is expected that Beijing will not dilute its claims over the disputed islands since nationalism prevails strongly in China. However, in another incident in 2011, both Vietnam and China signed an agreement seeking to contain the dispute. Accordingly, OVL of India had signed a three-year agreement with Vietnamese state-run PetroVietnam company for developing a long-term cooperation in the hydrocarbon sector. Accordingly, New Delhi had accepted Hanoi’s offer of exploration of some oil blocks in South China Sea. But, Jiang Yu, the former Chinese Foreign Ministry spokesperson, responded: “Beijing enjoys indisputable sovereign rights over the South China Sea and the islands that it covers. It is our persistent position that we oppose to any country that is engaging in oil and natural gas exploration, and development activities in the waters which are under Chinese jurisdiction. We expect that the outside countries do not get involved and entangled in the South China Sea dispute”. However, the Indian government responded, “The Beijing had concerns, but New Delhi is going by what Hanoi agreed to us”. In 22 July 2011, an Indian Navy ship, the INS Airavat, an amphibious assault vessel, on a visit to Vietnam off the coast of Vietnam was warned by the Chinese naval forces that it had encroached into the Chinese territorial waters [35]. However, the INS Airavat proceeded with onward journey as scheduled, and there was no confrontation from the Chinese forces. India has always claimed that its oil company involvement is purely an economic matter, and because of historical, technical and business reasons New Delhi do not want to get involved in the local dispute, while expecting a conducive and secured means for research and exploration [36]. The Southeast Asian countries trying to maintain a balance against the growing dominance in the SCS by inviting international players to the region such as the USA and India. Likewise, India in its outreach to South China Sea has developed bilateral and institutional relationship. Its institutional relationship includes India’s members in ARF for regional security, annual India-ASEAN Summit for regional cooperation and Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) for sub-regional integration. India has extended its diplomatic outreach to all countries. While Look East Policy of India led the landmark foundation of IndiaSoutheast Asia relationship, its “extended neighbourhood” policy in 2000 has brought the entire South China Sea region under its fulcrum of neighbourhood relationship. Further, in a more pragmatic way, New Delhi enunciated the doctrine of Act East Policy (AEP) so as to have an active and assertive role in the region that includes sea lane security, apart from its traditional economic aspects. Under the AEP, India is intended to achieve a degree of prominence and contains Chinese dominance, while

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ensuring sea lane security and energy trade and investment. In the 13th ASEANIndia Summit in 2015, Prime Minister Narendra Modi made a reference to the South China Sea at a public lecture in Singapore. He asserted for a mechanism that could promote cooperation in sea lane and maritime security, and counter-piracy. The issue also cropped up during the third India-Philippines Joint Commission on Bilateral Cooperation Meet held on 14 October 2015 in New Delhi. The meeting was cochaired by the former Indian Foreign Minister, Sushma Swaraj, and Albert F. Del Rosario, Secretary of Foreign Affairs of the Republic of the Philippines. Swaraj extended support for the durable solution of the West Philippine Sea or South China Sea conflict and complete adherence to UNCLOS, 1982. Both New Delhi and Manila also reiterated the significance for a full and effective execution of Declaration of the Code of Conduct of Parties in the South China Sea that was signed in 2002 [37]. Moreover, Modi’s visit to Vietnam in September 2016, the SCS issue cropped up for a dialogue between the two countries. Beijing well knows that the presence of regional powers like India may change the geopolitical calculus of the region and thereby, possible frictions in SCS and Indo-Pacific region. But, strategically, a Chinese sovereignty over SCS will bring its naval and military forces closer to the Strait of Malacca choke point, which is the artery of the Indian Ocean to reach Pacific region. This is a strategic entry point into India’s backyard, and India would never like China’s reach to that point. Further, the South China Sea has its geostrategic location for trade. It lies at the intervening waters between the Western Pacific and Indian Ocean. Since India’s maritime cooperation with Australia, America and other Pacific countries grows with, the increasing importance of trade and cooperation in this region is better considered as “Indo-Pacific”. About 50% of India’s trade passes through the intervening waters of SCS; therefore, peace and stability in the region are of great significance to it, and India’s joint military and naval exercise with the USA, Japan and Australia implies New Delhi’s better access to the stretch of intervening waters of South China Sea, in particular, and Indo-Pacific, in general. It is a fact that while China has consolidated its presence in the SCS, India has attempted to have its better footprints in the calculus that is titled a little more towards Beijing, as of now. India has made it clear that New Delhi is not in race for power in the region, but do not want this part to be under the control of China. As stated by former External Affairs Minister of State, General V. K. Singh, in the Parliament on 4 August 2016, “New Delhi supports over flight, freedom of navigation, and unimpeded commerce, which are well enunciated in international maritime laws and other related rules. As a State Party to the UNCLOS, New Delhi urges all parties in the SCS to show absolute and unhindered respect to the international laws.” This statement is in congruence to what New Delhi always reiterates to freedom of navigation and right of passage in international waters that includes South China Sea as well. In the wake Internal Tribunal’s verdict on ChinaPhilippines dispute, India’s ambassador to Vietnam, P. Harish, made an indirect reference that Beijing needs to respect the verdict of Hague tribunal, “India believes that the UNCLOS represents a foundational aspect of international law on oceans

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and seas, expect all parties involved to respect UNCLOS since India consistently advocated freedom of passage in the international water (s)”. An Assessment The existing resources of Arctic have attracted both the littoral and non-littoral countries for their increasing role in the region, and the trend is expected to continue in future. But finding large Arctic oil and natural gas deposits is difficult and expensive in nature to explore, export, and developing these resources commercially seems not profitable now. On the other side, the demand from Parliamentary green watchdog, the Environmental Audit Committee and international moratorium are meticulously looking into how the future Arctic oil and gas extraction could be reconciled with the international commitment to reduce temperature increase below to the level of 2 °C, and protection of living species in the Arctic. The Greenpeace also has reservations while the countries going for drilling in the region. But the realpolitik and the market seem to decide the future of the north, rather than the protest movements. On a slightly different note, many of the comments today have focused on the piracy charges against the Greenpeace protesters rather than the question of the audit. This raises a question about how the civil liberties protest can score high on their demands. Today’s resounding and scary scientific consensus is that an oil spill in the Arctic is inevitable, if drilling goes on. Along with economic, political and environmental challenges, it is pertinent that oil and natural gas exploration has adverse impact on living species and environment in the region. Hence, necessary and concrete steps are required to sustain the region, while going for energy exploration. The Arctic Council, a forum of Arctic states, which is concerned primarily with the developmental and environmental issues. The military dimension does not fall within its domain. It meets regularly to discuss ecological issues. But the US objection to the Paris Climate Change resolutions, under COP21, makes the council difficult to work for a concrete set of ideas and plans to evolve [14]. Looking into all these challenges and opportunities, it is pertinent to say that India has a natural interest in the Arctic, and India’s possible permanent membership in the Arctic Council will largely contribute for environmental issues, energy explorations, geopolitical dynamics and security concerns of the region. The South China Sea is an untapped and potentially resource-rich region that possesses high deposits of explored and unexplored oil and natural gas resources. Although a little exploration has been done, yet the quantum of undiscovered oil is more than the discovered resources. The chain of barren, largely uninhabited islands, reefs and banks are claimed wholly or partly by China, Vietnam, Philippines, Malaysia, Taiwan and Brunei. This region is largely interpreted as a potential area of economic, geostrategic and security significance. However, China is bullying the smaller countries in the highly contested archipelago and conflicts among the littoral countries turning the situation into a flash point of tension, insecurity and military standoff. A full-blown war in the region is possible, unless the parties involved come up with a peaceful resolution and durable peace and stability. It is much anticipated that the SCS will become the focus of exploration of oil and natural gas over the next decades. India is in favour of a peaceful and early solution of the existing issues

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so that its oil companies can have a secured research and exploration activities in the region. On the other way, Indian companies can go for investment provided that the claimant country provides security as the Chinese have assured to investors in their claimed territories, waters and seabeds. This implies whichever country assures better security the companies will go for exploration in those countries. The quest for unhindered access to resources, safe passage, free navigation and use of air space across the region are the basic mottos of India’s foreign policy and these have gained prominence in New Delhi’s foreign policy pursuits vis-à-vis Chinese claims. The larger presence or dominance of foreign powers like China in the South China Sea will definitely hamper India’s maritime security aspects and adversely affect emerging Indo-Pacific trade and business. So, in the contemporary period, India is showing pragmatism in its policy perspectives and strictly adhering to institutions and regimes for the resolution of South China Sea disputes. End Notes 1.

‘Oil and Natural Gas Resources of the Arctic’, http://geology.com/articles/arc tic-oil-and-gas/. 2. For the first time in recorded history, this past summer the entire Northwest Passage between the Pacific and Atlantic oceans was ice-free, according to scientists, in, ‘Arctic Melting May Lead To Expanded Oil Drilling’, World Watch Institute, http://www.worldwatch.org/node/5664. 3. Land accounts for about 1/3 of the Arctic’s area, 1/3 of the Arctic area is continental shelves and 1/3 of the Arctic is deep ocean waters over 500 m deep and this area is unexplored, in, ‘Oil and Natural Gas Resources of the Arctic’, http://geology.com/articles/arctic-oil-and-gas/. 4. ‘The dangers of Arctic oil’, http://www.greenpeace.org/international/en/cam paigns/climate-change/arctic-impacts/The-dangers-of-Arctic-oil/ and ‘Oil and Natural Gas Resources of the Arctic’, http://geology.com/articles/arctic-oiland-gas/. 5. The Indian Express, October 2, 2012. 6. ‘Drilling in the Arctic—what is the environmental impact? http://www.thegua rdian.com/environment/2013/oct/02/drilling-arctic-environmental-impact-gre enpeace-piracy. 7. ‘The dangers of Arctic oil’, http://www.greenpeace.org/international/en/campai gns/climate-change/arctic-impacts/The-dangers-of-Arctic-oil/. 8. Energy Information Administration (EIA), 2012. 9. EIA, 2012. 10. “National Security Presidential Directives-NSPDs”, The White House, January 9, 2009, http://fas.org/irp/offdocs/nspd/nspd-66.htm. 11. National Security Strategy, The White House, May 2010, https://www.whiteh ouse.gov/sites/default/files/rss_viewer/national_security_strategy.pdf. 12. The Arctic Council is mandated to protect the Arctic environment and promote the economies and social and cultural well-being of the indigenous peoples whose organizations are permanent participants in the council, in, ‘India and

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13.

14. 15.

16.

17. 18. 19. 20. 21. 22. 23. 24.

25.

26. 27.

28. 29.

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the Arctic’, June 10, 2013, http://mea.gov.in/in-focus-article.htm?21812/India+ and+the+Arctic. There has been opposition from some countries, especially Norway, on the grounds that the entry of large countries in the Arctic Council will eventually lead to diminishing role of the founder members, The Indian Express, October 2, 2012. Team Norway Newsletter, http://www.norwayemb.org.in/Global/SIteFolders/ webdel/Newsletterpercent20June-Augpercent2013.pdf. ‘India in Arctic Council with Observer Status’, The Indian Express, http://arc hive.indianexpress.com/news/india-in-arctic-council-with-observer-status/111 6294/. The first major Philippines oil discovery happened off the coast of Palawan On 11 March 1976, within the SCS Islands territories, and these oil fields now contribute about fifteen percent of all petroleum consumed in the country. The New York Times, May 4, 2007. ‘Row over South China Sea Islands’, hstyphoononline.wiki.hci.edu.sg/file/view/South China Sea +Islands4s1.pptx. ‘China and its Claims over the South China Sea Islands and South China Sea’, http://factsanddetails.com/china.php?itemid=1901&catid=8. The Washington Post, September 17, 2011. Some scholars have compared South China Sea as the “Persian Sea-II’ for its oil and natural gas resources. ‘China warns against the Philippines’ South China Sea Islands exploration’, 2011, http://www.menasborders.com/menasborders/news/article/1642/. The New York Times, April 21, 2009. The South China Sea Islands Dispute: Why is this important?’, 2011, http://energyinasiablog.com/2011/10/13/the-SouthChinaSea-islands-dis pute-defining-sea-lane-security/. ‘China warns neighbours to stop South China Sea Islands oil search’, 2011, http://www.energy-pedia.com/news/china/china-warns-neighbours-to-stopSouthChinaSea-islands-oil-search. The Economic Times, April 5, 2012. Observer Research Foundation(ORF), ‘South China Sea: India Should Avoid Rushing in Where Even US Exercises Caution’, September 30,2011, http:// www.orfonline.org/research/south-chinasea-india-should-avoid-rushing-inwhere-even-us-exercises-caution2/. “South China Sea Dispute,” General Awareness blog, http://generalawarenes sinfo.blogspot.in/2013/06/south-china-seadispute.html. Established in 1994, the ARF is a crucial platform for security dialogue in the Indo-Pacific region that provides an opportunity where the members can discuss security challenges, and develop a cooperative measure and mechanism for the furtherance of peace and security in the region. All the decisions are taken on consensus basis. It consists of 27 members such as the 10 ASEAN member states (Malaysia, Cambodia, Brunei, Indonesia, Myanmar, Philippines, Vietnam Singapore, Thailand, and Laos); the 10 ASEAN dialogue partners

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30.

31.

32.

33.

34.

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(India, the United States Australia, Canada, New Zealand, the Republic of Korea, Japan, Russia, China, and the European Union); Sri Lanka, Bangladesh, Pakistan, Mongolia, the Democratic People’s Republic of Korea, and TimorLeste; and one ASEAN Observer i.e. Papua New Guinea, in, Australian Government, Department of Foreign Affairs and Trade, ASEAN Regional Forum (ARF), https://dfat.gov.au/international-relations/regional-architecture/ Pages/asean-regional-forum-arf.aspx. Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan, and Nepal, are the member countries who are dependent on Bay of Bengal. The Permanent Secretariat of BIMSTEC is located at Dhaka. “Question No.2014. ‘India’s Interest in South China Region’, Rajya Sabha, August 4, 2016, http://www.mea.g0v.in/rajyasabhaf.htm?dtl/27229/ QUESTI0N+N02014+INDIAS+INTEREST+IN+SOUTH+CHINA+SEA+ REGION. ‘Incident involving INS Airavat in South China Sea’, Ministry of External Affairs, India, September 1, 201 1, http://www.mea.gov.in/media-briefings. htm?dtl/3040/Incident+involving+INS+Airavat. ‘In Hanoi, Modi to Address a Balanced Note’, The Hindu, September 22, 2016, http://www.thehindu.com/news/international/In-Hanoi Modi-to-strike-abalanced-note/articlel4621768.ece. ‘Drilling in the Arctic—what is the environmental impact? http://www.thegua rdian.com/environment/2013/oct/02/drilling-arctic-environmental-impact-gre enpeace-piracy.

References 1. Krupnick, Alan. 2011. Drilling for Oil in the Arctic: Considering Economic and Social Costs and Benefits, June 2. http://www.rff.org/blog/2011/drilling-oil-arctic-considering-economicand-social-costs-and-benefits. 2. Sinha, Uttam Kumar. 2014. India must take advantage of Moscow’s leverage in the Arctic region., The Hindustan Times, December 9. Russia’s Arctic resources were predominantly developed under a Soviet command-and-control economy, in, Keithley, Bradford G., ‘Sustainable Arctic Oil and Gas Exploration and Development’, Alaska Business, November 1, 2013. 3. McLendon, Russel. 2015. 5 dangers of oil drilling in the Arctic Ocean, May 12. http://www.mnn.com/earth-matters/wilderness-resources/blogs/5-dangers-of-oil-drillingin-the-arctic-ocean. 4. Saran, Shyam. 2011. Why the Arctic Ocean is important to India, The Business Standard, June 12. 5. Keithley, Bradford G. 2013. Sustainable Arctic Oil and Gas Exploration and Development, Alaska Business, November 1. 6. Krupnick, Alan J. 2011. Drilling for Oil in the Arctic: Considering Economic and Social Costs and Benefits, June 2. http://www.rff.org/blog/2011/drilling-oil-arctic-considering-economicand-social-costs-and-benefits, and EIA, 2012.

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7. McLendon, Russell. 2015. 5 dangers of oil drilling in the Arctic Ocean, May 12. http://www.mnn.com/earth-matters/wilderness-resources/blogs/5-dangers-of-oil-drillingin-the-arctic-ocean. 8. Vega, Cecilia and Waterfield, Alex. 2012. Arctic Battle: Oil Drilling Still Faces Environmental Concerns, October 9. http://abcnews.go.com/International/battle-arctic-oil-drilling-faces-env ironmental-concerns/story?id=17408236. 9. Atkin, Emily. 2015. Court Throws out Challenge to Shell’s Arctic Drilling Plans. June 12, http://thinkprogress.org/climate/2015/06/12/3669017/shell-arctic-drilling-oil-spill-response/. 10. Dadwal, Shebonti Ray. 2017. The Geopolitics of Gas: Common Problems, Disparate Strategy, 143. New Delhi: Pentagon Press. 11. Braw, Elizabeth. 2014. Putin Makes His First Move in Race to Control the Arctic, Newsweek, January 6. 12. Katusa, Marin. 2015. The Colder War: How the Global Energy Trade Slipped from America’s Grasp, Hoboken, John Wiley and Sons, pp. 95–96. 13. Kumar, Rajan. 2019. How Arctic is turning into a flashpoint for ‘new cold war, The Financial Express, April 11. https://www.financialexpress.com/defence/how-arctic-is-turning-into-a-fla shpoint-for-new-cold-war/1545204/. 14. Kumar, Rajan, 2019. How Arctic is turning into a flashpoint for ‘new cold war’, The Financial Express, April 11. https://www.financialexpress.com/defence/how-arctic-is-turning-into-a-fla shpoint-for-new-cold-war/1545204/. 15. Katusa, Marin. 2015. The Colder War: How the Global Energy Trade Slipped from America’s Grasp, 96–97. Hoboken: Wiley. 16. Braw, Elisabeth. 2015. Putin Makes His First Move in Race to Control the Arctic, June 1. https://www.newsweek.com/2015/01/16/putin-makes-his-first-move-race-control-arc tic-296594.html. 17. Sinha, Uttam Kumar. 2014. India must take advantage of Moscow’s leverage in the Arctic region, The Hindustan Times, December 9. 18. Osborn, Andrew. 2017. Putin’s Russia in biggest Arctic military push since Soviet fall’, January 31. http://www.reuters.com/article/us-russia-arctic-insight-idUSKBN15E0W0). 19. Bender, Jeremyand Kelley, Michael B. 2014. Global Militaries Know That The Arctic Is Melting—Here’s What They’re Going To Take Advantage, Business Insider India, June 4. http://www.businessinsider.in/Global-Militaries-Know-That-The-Arctic-Is-Melting-HeresWhat-Theyre-Going-To-Take-Advantage/articleshow/36013185.cms. 20. Dadwal, Shebonti Ray. 2017. The Geopolitics of Gas: Common Problems, Disparate Strategy, 128–129. New Delhi: Pentagon Press. 21. Taneja, Kabir. 2013. India Arrives at the Arctic, The New York Times, May 20. https://india. blogs.nytimes.com/2013/05/20/india-arrives-at-the-arctic/?_r=0. 22. Victor, Prevost. 2015. Arctic resources to boost Russia’s pivot to Asia, The Arctic Monitor, February 4. http://thearcticmonitor.org/tag/india/. 23. Shebonti Ray Dadwal. 2017. The Geopolitics of Gas: Common Problems, Disparate Strategy, 141. New Delhi: Pentagon Press. 24. Prevost, Atle. 2016. A role for India in Russian Arctic, The Independent Barents Observer, October 18. https://thebarentsobserver.com/en/arctic-industry-and-energy/2016/10/role-indiarussian-arctic. 25. Katusa, Marin. 2015. The Colder War: How the Global Energy Trade Slipped from America’s Grasp, 95–96. Hoboken: Wiley. 26. Muller-Kraenner, Sascha. 2008. Energy Security: Re-Measuring the World, Abingdon, Earthscan, Routledge, 24 p. (Quoted). 27. Pandey, Sidharth. 2013. India to expand engagement in the Arctic, NDTV, June 13. http://www. ndtv.com/india-news/india-to-expand-engagement-in-the-arctic-525302. 28. Saran, Shyam. 2011. Why the Arctic Ocean is important to India, Business Standard, June 12. https://www.business-standard.com/article/opinion/shyam-saran-why-the-arctic-ocean-isimportant-to-india-111061200007_1.html.

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29. Klare, Michael T. 2001. Resource Wars: The New Landscape of Global Conflict, 119. New York: Metropolitan Books. 30. Mabasa, Roy C. 2012. South China Searemains a sensitive issue. http://www.mb.com.ph/art icles/347003/SouthChinaSeas-remains-a-sensitive-issue. 31. Yama, C. 2011. China raises tensions over the South China Sea Islands, War?. http://peakoil. com/forums/china-raises-tensions-over-the-SouthChinaSea-islands-war-t61858.html. 32. Reyes, Leo. 2012. Taiwan protests Phl oil exploration in disputed South China Sea islands. http://digitaljournal.com/article/321140. 33. Liu, Nancy. 2011. Taiwan reasserts sovereignty over South China Sea s amid Philippines oil plans. http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aall&ID=201 203130015. 34. Pradhan, S. K. 2012. Spratly Dispute: Looking through Oil and Gas and India’s Energy Approaches, World Focus, June, vol. xxxiii, no. 6, pp. 76–81. 35. Furuya, Koichi, Indian company eyes development near disputed isles in South China Sea. http://ajw.asahi.com/article/asia/south_east_asia/AJ2011091710992. 36. Jian, Sanqiang. 2007. Multinational oil companies and the south china sea dispute. Journal of Contemporary China 6 (16): 591–601. 37. Jawli, Nandini, and Manju Jain. 2016. South China Sea and India’s geopolitical interests. Indian Journal of Asian Affairs 29 (1 and 2): 96–97.

Chapter 7

Pipelines: Challenges Many, Progress Slow

This chapter attempts to analyse the rationale of having pipeline infrastructure for energy supply, especially natural gas resources. India’s major pipeline initiatives and interests include Turkmenistan–Afghanistan–Pakistan–India (TAPI), Myanmar– Bangladesh–India (MBI), Iran–Pakistan–India (IPI) and Russia–China–India (RCI). Throughout the analysis, focus has been given on implications of pipeline, issues involved in the process and progress in the pipeline sectors. The chapter begins with the advantages of fast and convenient supply of energy while discussing challenges involved in the process. The challenges include political apathy of the transit countries, militant acts, sabotage and black marketing involved across the pipeline routes. While there has been progress in TAPI pipeline, the MBI, IPI and RCI are yet to take headways. Progress is stocked due to one or more reasons, largely due to security issues in Pakistan, uneasy relationship with China and Pakistan, western sanctions on Iran and increasing strategic relationship between India and the USA. Bangladesh, although a friendly country, yet MBI has been the hostage of domestic politics of Bangladesh. Taking into account all these factors and challenges, undersea pipelines and possible bypassing of the troublesome countries, seems viable alternatives, but the cost-effectiveness of such pipelines puts some shadow over the ideas and initiatives. Further, with regard to TAPI, although Afghanistan assured full security to India yet the country is not yet stable due to terrorist acts. Nevertheless, the chapter concludes with the fact that the pipelines could largely contribute for energy security, bilateral relations and regional integration of all the stakeholders.

7.1 The Essence of Pipeline The high costs of transporting liquefied natural gas (LNG) by refrigerated tanker ships tend to shift in attention to gas pipelines. Likewise, continental routes through train or trucks expose itself to the disturbances in the transportation process. Boom

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in the volume of gas production and large-scale transmissions today bears testimony to the overall profitability of pipeline routes. Natural gas supply through the pipelines has several advantages: first, faster supply; second, reliability; third, cheaper supply. Some of the pipelines are constructed to higher safety standards than others; therefore, those are more expensive to build. But, the initial high expanses of construction get compensated with cheap transportation advantages afterwards; and Fourth, decreasing LNG price in the international energy market. For example, in 2014 it was about $15–18 per MMBTU and by July 2019 it decreased to $9.32 per MMBTU [1]. The Indian demand for natural gas pipeline is in congruence to what the International Energy Agency (IEA) forecast, that the share of global natural gas demand is set to increase from 21% in 2011 to 25% by 2035. In another forecast, the International Energy Agency (IEA) in 2009 predicted natural gas demand up to 5.4% increase per annum over 2007–2030, i.e. reaching 132 bcm by 2030 , and over the next few decades, as the IEA forecasts, natural gas is going to dominate other energy resources in terms of absolute volumes of consumption, thus making it the most demanded fuel by 2040. Not only natural gas but also the demand for oil will increase in future, although not at the pace of former, and the pipeline will better serve a country’s oil and natural gas requirements. India today is pushing towards a gas-based economy by raising the share of environment-friendly fuel in the energy basket to 15% from current 6.2%, so as to meet COP21 commitment under the United Nations Framework Convention on Climate Change (UNFCCC). The government is committed to transforming India into a gas-based economy, and Dharmendra Pradhan, Minister of Petroleum and Natural Gas of India, said investments are being made for augmenting natural gas infrastructure, including pipelines, LNG import terminals and city gas distribution networks. However, the most proven gas reserves are concentrated in a few countries far from the main consuming markets and thus pipeline proves as one of the major means for secured, reliable and uninterrupted supply of energy [2]. In India, the pipelines are expected to promote economic activities of the nation and improved political relations among the country concerned. But, a certain amount of trust, commitment, security and geopolitics complicates India’s quest for pipeline. The international market for energy resources works on complex principles which poses challenges to pipeline. Nevertheless, the Indian government has resorted to various decisions, policies and steps, to import natural gas through pipelines. Hence, it is pertinent to analyse India’s energy quest through various pipelines such as Turkmenistan–Afghanistan–Pakistan–India (TAPI), Myanmar– Bangladesh–India (MBI), Iran–Pakistan–India (IPI) and Russia–China–India (RCI) pipeline projects and proposals.

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7.2 Turkmenistan–Afghanistan–Pakistan–India Pipeline (TAPI) 7.2.1 Impetus for Pipeline The country Turkmenistan has 17.5 tcm of proven natural gas reserves, i.e. 9.3% of the global proven reserves and the fourth-largest after Iran, Russia and Qatar [3]. By 2030, the country is expected to produce as much as 230 bcm gas per year. The most of the Turkmenistan’s proven gas resources is found in the Amu Darya Basin, Caspian Basin and the giant field Galkynysh, which is close to the Afghanistan border in the country’s South-east region. The United States Geological Survey (USGS) estimates that the Amu Darya Basin, of which 90% of Turkmen territory possesses, has technically recoverable undiscovered reserves of 6.9 tcm natural gas and 9.3 billion barrel (bbl) natural gas liquids (NGLs). The Caspian Basin has undiscovered technically recoverable reserves of 1.4 tcm natural gas and 682 million bbl NGL. Most of its Caspian resources (81%) are from the Southern Caspian Basin, corresponding to its national maritime boundaries with Azerbaijan. The Galkynysh field (formerly Osman-South Yolöten or South Yolöten) of Turkmenistan is the world’s second biggest gas field, after South Pars–North Field in the Persian Gulf, and it has the capacity to produce as much as 100 bcm/year, enough to simultaneously feed projected pipelines to Europe (30 bcm/year), India, Afghanistan and Pakistan (33 bcm/year), and China. Other important fields are Yashlar (1.4 tcm), Dauletabad (1.2 tcm) and Shatlyk (one tcm). All these potentials possess are the opportunities for the Indian investors and companies to look for Turkmenistan energy assets. Congruence to it, the TAPI pipeline, proposed in the mid-1990s, has been interpreted as the “pipeline of peace” and a “reflection of desire” to compliment India’s quest for energy security. It is expected to be a “transformative project” to meet the growing energy needs of the concerned countries. The 1735-km-long (1078-mile) pipeline is all set to cover 200 km in the territory of Turkmenistan, 735 km in Afghanistan and 800 km in Pakistan and finally reach India at Fazilka. The pipeline, which is expected to be completed by 2019, is intended to carry Turkmenistan natural gas from the Galkynysh oil field in Turkmenistan to Herat and Kandahar provinces of Afghanistan, before entering Pakistan. In Pakistan, it will reach Quetta and Multan before ending at Fazilka, the border town of Punjab in India. The pipeline will carry 33 billion cubic metres (bcm) of gas a year over 30 years from Galkynysh gas field, making it one of the world’s biggest onshore gas supply. Pakistan and India will get 42% each of that volume, and the rest will be purchased by Afghanistan. However, with Afghanistan agreeing to take 1.5–4 mmscmd against the original agreed volume of 14 mmscmd, the Indian volumes may increase to 43–44.25 mmscmd per year. Once completed, it could satisfy up to 35% of India’s annual natural gas requirements [4]. As per the agreement in 2013, the natural gas price at Turkmen border would be around 20% less than that of the Brent crude. In other words, at the current rate, such natural gas sale price would be around $3.2 per million metric British thermal units (MMBTU) and in

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the final translate it will turn into $6.5 per MMBTU after inclusion of tolling tariff and transit fee, which would be paid to Afghanistan and Pakistan. This would be slightly less than the proposed Iranian gas rate because of its larger quantities of export. The long-delayed pipeline has come to a breakthrough. With the willingness and cooperation of Turkmenistan, Afghanistan, Pakistan and India, the welding process of pipeline begun in December 2015, which was attended by Turkmenistan President Gurbanguly Berdimuhamedow, Indian Vice President Hamid Ansari, Afghan President Ashraf Ghani and Pakistan Prime Minister Nawaz Sharif [5]. There has been a vital impetus for Turkmenistan to go for pipeline supply of natural gas. Turkmenistan’s main source of revenue has been oil and natural gas exports, which constitute about 90% of the country’s export revenues. However, Turkmenistan is an example of how geopolitical considerations and narrowly defined interests of competing powerful countries can prevent a huge natural gas potential from being utilized. There are difficulties in using Russia’s pipeline network for exporting gas produced in Turkmenistan, and a dramatic decline in production has happened from 81.1 bcm in 1989 to 52 bcm in 1998 [6]. Turkmenistan basically exports natural gas to Russia, Iran and China. China is the main buyer of Turkmen gas, which imports between 30 and 35 bcm per year. In 2014, Russia bought just 11 bcm of Turkmen gas in 2014 and because of western sanctions its import slashed to 4 bcm in 2015. In recent years, a plummet in oil price, global economic recession and a consequent decline of energy demand from China and Russia, boom in the Russian natural gas sector and American shale has thus decreased the importance of Turkmen gas in the present-day energy market. Yet, Turkmenistan has pursued its energy policy to suit the changing geopolitical scenarios at the regional and global level. The country is vigorously looking for other, but potential markets to do trade [7]. Through TAPI, Turkmenistan finds India as a viable and potential alternative for exporting its energy resources, reducing Turkmenistan’s over-dependence on natural gas supply to Russia and China, and to move beyond the traditional adversaries. In its diversification approach, Turkmenistan has also negotiated with Azerbaijan for construction of pipeline that connects both the countries across the Caspian Sea, bypassing Russian territory. More to say, the Turkmen government also said that it had signed a “framework agreement” with a consortium of Japanese and Turkish companies to implement the third stage of expansion at Galkynysh that will boost the field’s output to 95 billion cubic metres (bcm) a year. The consortium includes JGC Corporation, Mitsubishi, Itochu, Chiyoda and Sojitz of Japan as well as Calik Group of Companies and Ronesans Endustri Tesisleri of Turkey.

7.2.2 Security Apprehensions The project is beneficial for India, Pakistan, Afghanistan and Turkmenistan, and it is a win-win situation for all the stake holders. But there are issues and challenges which have hindered the very progress of pipeline. As per the Turkmenistan laws, foreign companies are not allowed to develop its onshore oil and natural gas resources,

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which is corollary to what Energy Specialist John Roberts said, “you don’t make money from operating a pipeline, money is generated through developing a gas field, and being able to export such resources”. For Turkmenistan, these are the national resources and the government should have full control over them. The French oil company Total S.A. had initially envisaged interest in leading a consortium of national oil companies of the four nations—Turkmenistan, Afghanistan, Pakistan and India for the development of field and construction of pipeline. However, it backed off after Turkmenistan refused to accept its condition of a stake in the natural gas field that will feed the pipeline. In Turkmenistan, only the country China has direct access to Turkmenistan’s onshore gas fields, and in return, Beijing has been investing billions of dollars into Turkmenistan and has fully financed the construction of the Turkmenistan–China gas pipeline. Because of Turkmenistan’s conservative national policies, all major Western energy companies had lost their interest in the construction of TAPI pipeline. In past, the TAPI project had failed to attract the private sector partner. Like Total S.A., the ExxonMobil and Chevron declined to construct the pipeline largely because of two reasons: the declining oil prices and Turkmenistan’s insistence on retaining rights to its onshore gas reserves. After a long thought, and the changing demands and geopolitical dynamics of energy market, Turkmenistan finally set up a consortium and led the consortium with its state-owned gas operator Turkmengaz. Other three members of the consortium include Afghan Gas Enterprise (Afghanistan), Inter State Gas Systems (ISGS) (pvt) Ltd. (ISGS, Pakistan) and GAIL (India). Turkmengaz is the project operator which owns 85% stake in the project, and Afghanistan, Pakistan and India own 5% each. Although the matter has been resolved within the country, yet there have been political and security issues in the transit routes which have been hindering the progress of the pipeline. However, in the recent past, the Afghan President Ashraf Ghani tried to convince the tribal leaders, “The country supports international and regional projects and pipelines to ensure positive change”. Besides, he said, “TAPI being an economic importance, is a step forward in changing Afghanistan into an international economic hub in the region”. However, the project, in order to be successful, security of the pipeline is very important, especially in the parts of Afghanistan and Pakistan. Islamabad has already showed its interest to talk to Talibans about the security of the project. Pakistan’s Defence Minister Khwaja Mohammad Asif told to the BBC Urdu while responding to a question if Pakistan would use its influence on militant groups, especially the Talibans for TAPI security, “Of course, we would use it and for our interests, we would take all positive steps required.” In spite of the promises and commitments, there are two fundamental security issues and threats which needs to be traded cautiously: first, the deteriorating security situation and reorganization of Talibans in Afghanistan and across Afghan–Pakistan border. The pipeline in Afghanistan will cross through the territories of Helmand and Kandahar provinces which are traditionally considered as the areas of to be Taliban strongholds. Second, there is no coherent mechanism and unanimous stand to prevent participating states from using the pipeline as political leverage and tool to blackmail against other parties. This can be best expressed in the context of Pakistan’s anti-India political rhetoric. Turkmenistan’s approach is that it

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will take security responsibility till the natural gas crosses its border, and argues that it will have no responsibility afterwards, says John Roberts, Transaction Advisor of Asian Development Bank (ADB) that funds the pipeline. So, it is not clear which state or international agency will ensure that Pakistan will not cut off or disturb the supply flow into India if there is a new wave of tension, conflict happens and grave situations develop between Pakistan and India. The ADB tried to explain it well, but ended with a lack of clarity. The transaction adviser of this project, somewhat, replied to BBC that lacked concrete mechanism and responsibility, “We believe that all the parties will be actively working to ensure that the gas flows cannot be manipulated for political leverage, and they will put suitable mechanisms to deter the impediments” [8]. In the absence of a concrete mechanism, New Delhi, which perceives the TAPI pipeline project as a “reflection of desire and a legacy to set”, has urged all the stakeholders to work together with a commitment to ensure that the negative forces inimical to the progress and success of the pipeline project are addressed and resolved in an effective manner.

7.2.3 Economic Mileage and Geopolitical Gains The pipeline has several national, regional and international implications, and some of the specific implications of the pipeline are mentioned here. First, the pipeline will demonstrate itself as a trailblazer and open the doors for similar projects among all the South Asia nations. Terming regional connectivity as an issue which is close to his heart, former Pakistan Prime Minister Nawaz Sharif said the pipeline will help to bring prosperity and peace to the region. TAPI is more than a project and a foremost step for the unification of region and integration with the Central Asian nations. Specifically, the pipeline will lead to India’s better presence in Central Asia—a step forward for the materialization of India’s “Connect Central Asia” Policy. Second, for Afghanistan, it is a path-breaking development since it will contribute to overcome the history of scepticism that exist among the nations, and re-establish ties among the nations, which were once ruptured in the advent of the Soviet aggression and Taliban rule. Third, the TAPI pipeline is an alternative supply route to enhance India’s energy security that will further diversify the fuel basket to the benefit of Indian economy, where the natural gas will be largely used for power, fertilizer and city gas distributions. Fourth, the TAPI will help Afghanistan to use some of its natural gas supply for its domestic consumption, increase of budget revenues through transit fees, attracting of much-needed investment for Afghanistan and the country’s overall reconstruction programme. Fifth, the four nations will have a positive carbon footprint due to use of natural gas for energy production. Significant to add, India is the world’s fourthlargest carbon emitter and accounts for 4.1% of the total global emission. India’s ratification of Paris Agreement on climate change under the 21st Conference of the Parties (COP21) clearly implies that India needs more clean energy, and for this, the TAPI gas pipeline will prove a major contributor. Sixth, Kazakhstan’s natural gas production in December 2015 increased to 42 bcm and the country poses itself as

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partner to rely in stabilizing the world energy market. In future, the Kazakhstan can use this pipeline to supply natural gas to India, with a cheaper price and better convenient route. Seventh, India does not have inter-country natural gas pipelines, although it has domestic pipelines for the supply. If the TAPI pipeline materialized, India will have its first intercountry connection and will prove itself as a major global player on natural gas energy market and pipeline infrastructures. Eighth, geopolitically, there will be a better presence of India in Afghanistan and its reconstruction and development programmes, and thus, accentuation of multifaced cooperation between the two countries. Ninth, the project is very significant for Pakistan’s energy security since it faces acute energy shortages, and the demand for natural gas in Pakistan, by 2029–30, is expected to reach as high as three times more than the present-day supplies. Tenth, Turkmenistan is keen to implement this project in order to diversify its export routes and decrease its dependency on Russia and China for using its infrastructures and natural gas supply.

7.3 The Myanmar–Bangladesh–India Pipeline (MBI) 7.3.1 Pipeline Pursuit The “Energy Plus” approach, as Myanmar has been approaching, is expected to break the energy–poverty cycle of the country by integrating more efficient energy resources to its energy basket so as to generate more cash reserves and ensure better livelihoods for the people. This approach is in contrast to the “minimalist” approach of energy consumption that focuses on the basic energy needs for the poor, and provides a couple of opportunities to increase their income sources (UNDP, 2011) [9]. The Energy Plus policy seeks for not only a robust energy security strategy for the country but also supply of country’s oil and natural gas resources to energyimporting countries in the world. Myanmar has 3.0 tmb (0.4 tmt) oil reserves which constitutes 0.2% of the global share, and its production constitutes 682 tbd (31.5 million tonnes) which is 0.7% of the total global production. Its natural gas reserves include 1.2 (trillion cubic metres) or 41.3 tcf which is 0.6% of the global share, and its production includes 17.8 bcm (15.3 million tonnes oil equivalent) that constitutes 0.5% of the global natural gas production [10]. In another report, as revealed by World Energy Council, 2016, in 2014, proved recoverable oil constituted 3 million tonnes and natural gas reserves 283.2 bcm. The production of both included 0.8 mt and 16.8 bcm, respectively [11]. The country has three main offshore and 19 onshore oil and natural gas fields, and it has sufficient reserves to meet its energy requirements and energy supply for more than 30 years. Further, the country is expected to explore more reserves of natural gas from the eastern Karen state. The existing energy potential and booming energy sector of Myanmar have been an opportunity for the Indian companies to grab the future. India has already invested in the energy assets of Block A-1, Block A-3, Shwe Offshore Mid-Stream Project, Block B-2, Block EP-3, Block

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M4 and Block YEB. The ONGC Videsh Ltd (OVL), Oil India Limited (OIL) and the GAIL (India) Limited or GAIL (formerly Gas Authority of India Limited) are the active explorer of the country. The OVL has the Operator Right in Block B2, Block EP-3; the OIL is the highest stake holder (60% each) in Block M4 and Block YEB; the OVL (8.347%) and GAIL (4.1735%) have invested in Onshore Gas Transportation Pipeline Project in Myanmar [12]. This pipeline is being constructed by China National Petroleum Corporation (CNPC) to transport gas from the offshore blocks A-1 and A-3 to China. The $2 bn gas pipeline project involves China National Petroleum Corporation (CNPC) with 50.9% (with Operation Rights), Daewoo with 25.041%, Korea Gas Corporation (KOGAS) with 4.1735%, ONGC and GAIL with 8.347% and 4.1735%, respectively, and Myanmar Oil and Gas Enterprise (MOGE) with 7.365% [13]. Recently, the Cabinet Committee on Economic Affairs of the Indian government has instructed to OVL and GAIL for an added investment of a total of $1.33 bn in offshore gas projects in Myanmar’s western Rakhine state. The OVL is in a foray for a 20% stakes in Myanmar’s upstream oil development for which it will have to pay $664.7 million, and a 8.35% stake in onshore midstream project PIPECO-2, with a payment of $167.84 million. If the output from the Essar Oil’s stakes in Myanmar’s onshore Block L and offshore Block A-2 is commercially viable, then these resources could also be supplied to India. The Essar is hopeful of exploration of the oil wells soon, and the blocks ideally exist between the proven gas reserves in Myanmar, and well aligned with the regional corridor of natural gas fields of the southern Bangladesh, that includes the potential Sangu gas field [14]. H. E. U. Win Khaing, Union Minister for Construction, Electricity and Energy of Myanmar, in his official visit to India to attend the first General Assembly of International Solar Alliance, 2018, expressed his country’s keenness to work for strengthening of bilateral engagements in the oil and natural gas sector, and making it one of the important areas of bilateral engagements. In spite of these progresses in the energy sector, the much expected and long-planned Myanmar–Bangladesh–India (MBI) gas pipeline has been delayed, with a less optimism today. Myanmar is the largest pipeline natural gas exporter in the Asia Pacific region, and the country has exported 12.7 bcm of pipeline natural gas in 2014. Significantly, this volume of pipeline natural gas was exported to Thailand and China at 9.7 bcm and 3 bcm, respectively. The discovery of three large gas fields in the Bay of Bengal off the Arakan coast of Myanmar has prompted the Myanmar government to export more natural gas through a trans-border natural gas trade route for its neighbouring nations, in addition to supplying natural gas to Thailand and China. Hence, India today has posed as a potential market to Myanmar’s supply. The three major gas fields include—Shwe, Shwe phu and Mia, which were discovered by the South Korean oil company Daewoo International along with OVL and GAIL. The Shwe gas field is the largest one in the country with 14 trillion cubic feet of natural gas [15], and New Delhi expects to bring gas reserves from Shwe field in Block A-1, as well as the volumes that are yet to be discovered in its adjacent Block A-3. In both the blocks, OVL has a 17% stake and GAIL (India) has an eight percent stake. South Korea’s Daewoo is the operator of these two blocks in the Shwe field [16]. This Shwe field possesses promising future for MBI pipeline. The idea of MBI project was

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initiated by Mohana Holdings, a Bangladeshi company, in 1997 for export of natural gas from Myanmar through its Arakan (Rakhine) state, to Bangladesh, and finally reaching to India—the destination of pipeline. The 1575-kilometre long project has been estimated to cost $1 billion that will be entirely borne by India, and Bangladesh will get the transit fee annually for letting its territory for the use of transportation. The pipeline is expected to import gas from the blocks of Myanmar to the Sittwe, and then reach to Bangladesh and finally Kolkata in India [17]. In the early 2005, a tri-nation Technical Committee was set up by Myanmar, Bangladesh and India that met in Yangon, where Bangladesh proposed some changes in the much discussed draft proposal for pipeline network. First, the pipeline would have an open access nature and structure for injecting and siphoning of natural gas by India and Bangladesh at their designated intake and off-take points across the pipeline. Second, the pipeline starting from Myanmar will reach to Bangladesh through the southern Teknaf border instead of Brahmanbaria border, and then proceed towards Chittagong before reaching to the Indian territory. Third, the Bangladesh portion of the pipeline will be operated and maintained by its Gas Transmission Company Limited (GTCL), for which Dhaka would charge a fee from India. Fourth, instead of Indian sponsorship, the pipeline would be constructed by an international consortium. All these points were well accepted “in principle” by both Myanmar and India, however subjected to further discussion, and the route of the pipeline set to be determined by a mutual agreement of the three concerned countries with a view to ensure maximum security, optimal economic utilization and adequate access. However, Dhaka coined three additional conditions. First, India will provide its corridor for an unhindered access for the Bangladeshi goods and services that could reach to Nepal and Bhutan. Second, New Delhi will allow its continental corridor to Bangladesh for the import of hydroelectricity from Nepal and Bhutan. Third, India should take the measures to reduce huge trade deficits that Dhaka facing vis-à-vis New Delhi. Specifically, the measures included lifting of trade barriers and accompanying trade concessions [18]. Bangladesh claims that its trade imbalance with India is due to various non-tariff and tariff barriers set imposed against Bangladeshi goods; therefore, Dhaka sought for a larger “parity” in bilateral trade and investment [17]. However, the Indian government declined to negotiate or accept all these additional points and conditions in the tri-nation gas pipeline forum. Therefore, Dhaka showed its indifferent attitude towards the pipeline. India has opposed to the new conditions set by Bangladesh, citing the demands “completely unrelated”. India’s then Minister of External Affairs Natwar Singh noted that “under no circumstances New Delhi is going to accept any of the conditions which will encourage Dhaka to put unrelated conditionalities in the forthcoming negotiations. India will always consider bonafide demands, not unfair bargaining’s” [19]. Apart from these non-genuine demands and conditions as set by Bangladesh, there are also reasons for which India has been showing reluctance to accept the conditions set by Dhaka. First, with regard to trade deficit, Bangladesh has an unfavourable balance of trade with most of its trading partners, and with New Delhi it exceeds US$2 billion. This is largely due to a very small export basket that the country has vis-à-vis India. Further, its infrastructure is underdeveloped to compete with India. Instead of

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taking corrective measures to reverse trade deficit to trade surplus, Bangladesh always expects perverse concessions from its neighbours and other countries. For example, Dhaka has approached to Washington to allow duty-free access to Bangladeshi products and reacting to the demands; the USA, instead, has asked Bangladesh to take necessary steps to improve its infrastructure facilities and economic competitiveness, and not to put the onus on the US market [20]. Due to security concerns across the North-eastern regions of India it is difficult for India to accept any such demands. Allowing Bangladesh a corridor in India to trade with Nepal is not possible as of now since it would worsen the existing problem of illegal immigration, insurgency and related security aspects. Along with the active insurgent groups and terrorist faultlines, the Siliguri Corridor is highly vulnerable to foreign agencies like InterServices Intelligence (ISI) and Directorate General of Forces Intelligence (DGFI, Bangladesh). Allowing this corridor to Bangladesh would seriously threaten and undermine India’s internal security and national interest. Third, Bangladesh expects import of hydropower energy resources of Bhutan and Nepal through the use of Indian territory. Ironically, both the countries are dependent on India for their energy and hydropower requirements. Hence, a sense of misperception looms large among the political elites and diplomats in Bangladesh. The deadlocks and delays in the pipeline project had resulted in China’s entry to such resources and subsequent construction of pipeline between China and Myanmar. China’s PetroChina concluded a lucrative deal with the government of Myanmar. After a discussion between the two countries, it was made purposeful that the pipeline will bring the natural gas from Block A-1 of Than Shwe energy field (Rakhine coastline), from where India had expected import of natural gas through the pipeline. According to the agreement, China will import 12 bcf of natural gas and 12 million tonnes of crude oil yearly from Myanmar, within an agreement period of 30 years— starting from 2013 [21]. For this, Beijing will invest $5.6 billion in Myanmar for the development of its energy fields. This footprint of PetroChina added another feather to the existing footprints of China National Petroleum Corporation (CNPC), China National Offshore Oil Corporation (CNOOC) and China Petroleum and Chemical Corporation (Sinopec) in the country [22]. This lost opportunity of India is in the similar way that the Chinese companies, in past, took the lead in getting oil and natural gas assets in Venezuela, Kazakhstan, Angola, Mongolia, Ecuador, against their Indian counterparts. Much of the India’s current drive to secure Myanmar’s energy resources owes to the fear of falling behind to the mammoth Chinese presence in a geostrategic neighbouring country. In spite of the growing hiccups, in recent years, both New Delhi and Dhaka seem to show their interest for an effective mechanism for the execution of pipeline project, and both GAIL and ONGC have approached to Myanmar to secure energy resources from the offshore blocks and fields. Unlike past, the Myanmar government has urged both Dhaka and New Delhi to speed up and finalize an agreement on the pipeline proposal. New Delhi has continued to press for some more time until it becomes clear that Bangladesh responds the matter in a more responsible manner. The MBI pipeline is not materialized because of troubled bilateral politics of Dhaka. However, India has the option of connecting a pipeline between India and

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Myanmar—bypassing the territory of Bangladesh. Since India and Myanmar are on negotiation for an MOU for furthering of cooperation in the oil and natural gas sector and establishment of a cooperative institutional mechanism on the basis of equality and mutual advantage, the GAIL has been approached by the Myanmar’s counterparts to prepare a feasibility study for the pipeline that will start from Myanmar and reach India through the North-eastern states of India, thus bypassing the contentious Bangladeshi politics. New Delhi is still hopeful that there are plenty of natural gas left in Myanmar to meet India’s expectations. The possible alternative route is expected to run from Myanmar to Mizoram, Tripura and Assam, to Siliguri and finally Kolkata in West Bengal under the Kaladan multimodal transport project. However, this route has 500 km longer distance than the proposed distance of MBI, and an extra cost of Rs.2.500 crore will be spent to the existing cost of Rs. 4500 crore. The earlier project was intended to bring natural gas to India from Myanmar’s Block A-1 that is in close proximity to Teknaf in Bangladesh. At present, the available natural gas is far away, i.e. from the offshore Block A-2 and New Delhi, if wants resources from such block, an extra 150 km pipeline needs to be constructed. In short, while going on its own, New Delhi finds the problem of increasing cost of the pipeline. Yet, the pipeline has its own merit since a part of this extra expenditure will be offset by the transit fee that Dhaka will charge for allowing its territory for pipeline. Further, the pipeline passing through the North-eastern region of India will lead to infrastructural development which has been “lagging behind” in the developmental process. However, through this route India will face the challenges in the form of security threats which have been emanating from insurgent groups in the region, and security vulnerability at the India–Bangladesh–Myanmar trilateral border juncture. Likewise, MBI is not free from the militant acts in Bangladesh, North-eastern parts of India and Indian parts of Myanmar border.

7.3.2 Pipeline Implications Nonetheless, the MBI project has larger implication for New Delhi rather than the mere supply of energy to meet its domestic energy requirements, and the implementation of pipeline will be a milestone development in India’s quest for energy security. The implication of the pipeline has far-reaching consequences. First, with the halt of Iran–Pakistan–India (IPI) gas pipeline due to US–Iran imbroglio, and India’s uneasy relationship with Pakistan—through which the pipeline will cross, the natural gas energy assets of Myanmar could prove a reliable support for India’s energy quest. Second, the execution of TAPI and MBI pipelines is the major step for the implementation of the proposed and much talked South Asian Energy Grid. Third, the geographic proximity of Myanmar and Bangladesh makes the import of natural gas more convenient and cost-effective proposition to meet the energy requirements of economically backward North-eastern region of India, and thus infrastructural development in eastern and North-eastern states of India. Fourth, the economic cooperation between India and Myanmar will turn highly enforcing to each other.

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Myanmar can largely contribute as a gateway for India to reach the South East Asian nations, and reduce or match the influence of other powers in the South East Asian nations. Further, since Myanmar is a neighbouring country to India, like China, New Delhi’s effective presence in the country could foil or limit China’s possible ambitious plans against India in the Indian Ocean and geostrategic location of Myanmar. Fifth, the collaborative projects like natural gas pipeline can serve as a building block for greater bilateral cooperation between India and Bangladesh. Streamlining from this point, both the countries, along with Myanmar, can move forward to work together to meet their common interests such as fighting terrorism and insurgency, resolving trans-border migrations and uniting against regional and global challenges. Sixth, through the natural gas pipeline, Bangladesh will get $100 m in the form of transit fee annually, and all these advantages are coming to the country when it is not investing in the project. Further, the possible involvement of Bangladeshi Gas Transmission Company Limited (GTCL) in the pipeline project will earn the company $24 million annually. Seventh, Bangladesh will be able to supply natural gas from the eastern part to the western part of the country. Eighth, Bangladesh’s total natural gas output is about 2180 million cubic feet per day (mmcfd), against its own domestic requirement of 2500 mmcfd [23]. However, the actual demand is expected to be higher when the industries and housing units will get connected with the national grid. The pipeline can fulfil a part of its requirements and guarantee future energy security of Bangladesh, said by A.K.M. Mosharraf Hossain, the then State Minister for Energy and Mineral Resources of Bangladesh [24]. Further, the exhaustion of Bangladesh’s natural gas reserves which is expected to happen in near future, the energy import through the pipeline will meet a part of its present and future energy requirement. Ninth, Bangladesh has also approached to Turkmenistan and expressed its intention to import natural gas through the TAPI pipeline. In a response, Ashgabad has asked Dhaka to hold negotiations with New Delhi, Islamabad and Kabul, before going for a deal [25]. Therefore, execution of MBI is a bargaining chip of India so as to extend TAPI to Bangladesh, and it is expected that without sincere approach of Bangladesh on MBI, the TAPI extension may not be possible. Tenth, there are proposals from the energy policymakers of Bangladesh to construct a pipeline between Myanmar and Bangladesh of their own so as to import energy resources from Myanmar [26]. But, without the financial and technological support and involvement of Indian government, it seems impossible for Dhaka to execute the plan.

7.3.3 Progress Without Commitment Although New Delhi had a fractious relationship with the governments in past, yet the present government in Bangladesh has created new grounds for cooperation. The Sheikh Hasina government has shown its interest to streamline the existing bilateral energy relationship since it feels that the tri-nation gas pipeline project has turned into a strategically significant issue that needs resolution, and for her, the

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“tri-nation project is a strategic issue that needs a trilateral response”. Some of the contentious issues were addressed and resolved during her visit to India after an electoral victory in 2008, who sought for a forward-looking ties with India, treated India as a “natural friend” and approached to New Delhi to “open new doors for a new era” in bilateral relationship [27]. Congruence to the positive attitudes, Bangladesh has granted India an opportunity to access its Chittagong and Mongla ports for the movement of Indian ships and goods. In a reciprocal exchange, India has expressed its intention to provide a conditional access of its territory for Bangladeshi goods to reach Bhutan and Nepal. India and Bangladesh have signed five agreements, including one on energy-sharing and three on counterterrorism. India has announced a $1 billion line of credit (LOC) for infrastructure development in Bangladesh that includes energy as well. Significantly, this is the highest grant of India to be offered to any foreign country. India is also assured to supply 250 megawatts of power to Bangladesh from its central grid. India has offered a reduction of items from its negative trade list which will benefit Dhaka. Bangladesh has appreciated India’s initiative to provide a duty-free access of the least developed countries of the SAARC nations to the Indian market. Dhaka has recently approached to Tata Steel Company to invest in Bangladesh a worth of $3 billion, and Bharti Airtel has showed its interest to expand its services in the country. Complementing to New Delhi and Dhaka rapprochements and expanding relationship, U Kyi Thein, Myanmar’s ambassador to India, said, “The gas pipeline project may take shape in an immediate future and Myanmar has enough gas for India. There could be major contribution of the Indian companies like the ONGC, IOC, GAIL and Essar Oil, in the energy assets of Myanmar” [27]. But, at the same time, Myanmar has also pointed out that any further delay from the Indian side may lead Myanmar to sign similar deals with Japan, South Korea and Thailand, who are competing in the Myanmar’s energy market. Beijing, in any case, is always showing its readiness to buy more oil and natural gas resources from this country. India has already invested in the oil and natural gas assets of Bangladesh. The OVL with 45% stake has owned the Operator Right in the Block SS4. Other stakeholders of this block include OIL 45% and BAPEX 10%. Likewise, the OVL has invested in Block SS9 with 45% stake and Operator Right, whereas OIL with 45% and BAPEX 10 [12]. The Indo-Bangla Friendship Pipeline (IBFPL) agreement signed between Narendra Modi and Sheikh Hasina in 2018 is a breakthrough for constructing a 130km-long pipeline from Siliguri in India to Parbatipur in Bangladesh which will supply 1 million metric tonne (MMT) of diesel to Bangladesh Petroleum Corporation for 20 years. Till the pipeline becomes operational, Numaligarh Refinery is supplying diesel by rail rakes. Indian companies are also working on building a land-based LNG terminal in Bangladesh so as to augment supply of natural gas to Bangladesh and establish a pipeline to the Jessore–Khulna power plant of Bangladesh across the Panitar–Satkhira border points on the Indian and Bangladeshi side, respectively. The pipeline will supply R-LNG from the upcoming Dhamra LNG terminal in Odisha. New Delhi is also working out modalities with Bangladesh for supplying LPG from its storage facilities in Chittagong port city to demand centres in Tripura [28]. Although these steps in recent period are very progressive streamlining energy cooperation, yet both the governments should take care that the inimical forces are not hindering the

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smooth progress of their relationship. Some of the issues should be resolved and taken into account very meticulously. First, the gas pipeline between India and Bangladesh should not be the hostage of internal politics of Bangladesh. Dhaka should aim at setting the motion of goodwill and structures that last beyond the thinking of a political party or individual in power. Second, India may take some more measures in lifting of some trade barriers which will not cost the Indian exchequer much. Third, in the context of electricity supply from Nepal and Bhutan to Bangladesh, Indian officials must meet their counterparts in Bangladesh to address the absurdity of issues and convince them the shortage of power supply in those countries.

7.4 Iran–Pakistan–India Pipeline (IPI) 7.4.1 Pipeline Pursuits Iran’s South Pars field which possesses about 450 trillion cubic feet (47%) of its total natural gas reserves in the country has been exposed to exploration and investment. Since the discovery of South Pars natural gas field in 1990, Iran has been proposing for a pipeline project that can transport the Iranian natural gas to both Pakistan and India. Initially, the pipeline was meant for Iran and Pakistan; later, India proposed joining of the project so as to extend the pipeline from Pakistan into India. Accordingly, Iran and India signed an MoU for an overland natural gas pipeline in 1993, and in February 1999, Iran and India inked an agreement in this regard [29]. In 2002, Iran and Pakistan signed an agreement on a feasibility study for such a pipeline—connecting Iran, Pakistan and India. Accordingly, the pipeline will start from Asaluyeh in Iran to Bandar-e Abbas and Iranshahr in Iran, and reaches to Khuzdar and Mutan in Pakistan, and Barmer in India before finally reaching to New Delhi. From South Pars of Iran, the total length of the pipeline up to the Indian border (near Barmer) is about 2135 km, of which 1100 kms within Iran and the rest within the territory of Pakistan, and from Barmer travelling 860 km to reach Delhi. As per Indian government estimates, investment required for this pipeline was $7 billion [30], and Iran has already shown its interest to contribute for 60% of its total costs. The pipeline is expected to transport Iranian natural gas to the Asian subcontinent with a 5.4 billion cubic feet (Bcf) capacity. The pipeline would supply both the countries with natural gas: India with 90 million cubic metres per day and Pakistan 60 million cubic metres per day. Iran will initially transfer 30 million cubic metres of gas per day to Pakistan, but will eventually increase the gas transfer to 60 million cubic metres per day. However, due to the ongoing tensions between USA and Iran, militancy and security issues in Pakistan, and fast changing Indo-US relationship under the geopolitical dynamics, there has been a slow progress on this trilateral pipeline connectivity. However, Iran and Pakistan have started the process of construction of pipeline under the Friendship Treaty. Iran has completed its part of the pipeline in its territory although Pakistan has fallen behind the target to take delivery of gas, initially scheduled for 2014. There

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is a little progress in the IPI, yet the project is alive. Addressing a weekly media briefing here, Foreign Office Spokesperson Dr Mohammed Faisal of Pakistan said the IPI project is not frozen. The Standing Committee on petroleum and natural gas of the Indian government in 2016 submitted a report to Parliament which revealed, “The transnational pipelines are important elements of national energy security and they need to be pursued vigorously. Hence the government should examine the idea of reviving the (IPI) project as international developments have become favourable following the lifting of sanctions against Iran by the Obama government”.

7.4.2 Implications Riddled with Imbroglio The execution of IPI pipeline has national, bilateral, regional and global implications. First, a land-based pipeline is cheaper than the other means, and it is estimated that the IPI is four times cheaper in spite of paying transit fee to Pakistan. Second, Pakistan could earn about $300 million annually in transit fees from the pipeline and also would be able to purchase natural gas from the pipeline. Third, geographically, Iran is the most convenient supplier of natural gas to both the countries. Fourth, IPI is a step towards Asian energy security and South Asian Energy Grid. The former Petroleum and Natural Gas Minister of India Mani Shankar Aiyer, in 2006, had rattled the global energy markets by vigorously promoting a compact of Asian countries to ensure their energy security. “The twenty-first century will indeed be the Asian century only if Asian countries join hands keeping Asia together”. Fifth, the pipeline will be a step forward towards the materialization of International North-South Trade Corridor (INSTC), and thus connectivity to Central Asia, Europe and Russia. Sixth, increasing cooperation will lead to a strategic leverage of India and Iran in the Indian Ocean region, and New Delhi’s better footprint in the Arab world. Seventh, since USA has taken all the steps to isolate Tehran internationally and marginalize the nation economically, the robust bilateral energy cooperation between Tehran and New Delhi will thwart Washington’s international strategies on Tehran. Although the pipeline will lead to many opportunities, yet there are issues which are hindering the process. First, Pakistan has been demanding transit fee of US 50 cents per million British thermal units (MBTU), while India wants it to be US 15 cents per MMBTU [31]. Second, as a transit country, Pakistan has shown its interest to provide “international guarantees” under the principle of “national treatment” [32]. Although the security responsibility would lie with the international consortium, in association with three member parties, there is the risk of disruption. The international guarantees can reduce, but cannot eliminate the chances of such a cutoff due to militancy in Pakistan [33]. Further, there is apprehension that if any major conflicts happen between India and Pakistan, the natural gas supply to India will get disrupted, and New Delhi is in dilemma, whether to go for a high-risk pipeline without having sovereign guarantees of Pakistan [34]. Third, Saudi Arabia is not happy on the progress of Pakistan–Iran pipeline and Iranian supply to India. Riyadh has already expressed its displeasure over the nuclear programme of Iran and US

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nuclear deal with Iran [35]. Historically, both Iran and Saudi Arabia have been at loggerheads on regional issues and global affairs. Hence, India while going for IPI, and expansion of relationship, the changing attitude of Riyadh is very much expected. Fourth, India has to materialize the pipeline project very fast since China has shown its interest to take the Iranian gas through the transit country Pakistan and from the same Iran–Pakistan pipeline. China has already expressed its interest to import a 1.05 billion cubic feet of gas from Iran through the pipeline if India does not participate in the project. So, Pakistan will support this since without India’s participation Pakistan can still enjoy the status of a transit country and transit fees thereupon [31]. Fifth, instead of IPI, the USA is pushing India to move for TAPI pipeline, and the recent progress of TAPI is largely an outcome of Washington’s influence on all the stakeholders for the pipeline [36].

7.4.3 Undersea Pipeline Options There are some crucial and unresolved issues involved between India and Pakistan for materializing the IPI project. The proposed idea of subsea pipeline is being seen as an alternative connectivity that will bypass the territory of Pakistan and reach to India. Coincidentally, the deep-sea pipeline technology, which has been seen as a very expensive investment in past, is now turning financially feasible. Already similar pipelines are being laid under the Mediterranean Sea connecting Algeria with Italy, pipelines in Black Sea, Germany and Russia maritime routes (Nord Stream). The 1300 km undersea Iranian pipeline is expected to start from Chabahar Port or Kuhe-Mubarak passes to Oman and reach at Porbandar in Gujarat. Afterwards, it will be connected to India’s national gas grid. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has released the results of its feasibility study on a trans-national deep-water gas pipeline. Accordingly, an undersea pipeline between Iran–Oman–India will connect the producers and consumers of natural gas directly, by bypassing the territories of Pakistan. Iran has already signed the undersea agreement in 2013 to supply gas to Oman in a deal valued at $60 billion over 25 years, and in 2017, these two countries agreed to change the pipeline’s route to avoid waters controlled by the United Arab Emirates. The planned pipeline would connect Iran’s vast gas reserves with Omani consumers as well as with liquefied natural gas (LNG) plants in Oman that could re-export the gas to India. The SAGE Company wants to execute the Iran–Oman–India undersea gas pipeline under its broad framework of “Middle East to India Deep-Water Gas Pipeline”. The pipeline, estimated to cost over $4 billion, will carry 31.5 million standard cubic metres natural gas per day and will be built in two years from the date of necessary approvals and a Gas Sale and Purchase Agreement (GSPA) being signed [37]. Any country or company interested to buy natural gas from Iran can use this pipeline on rent. The South Asia Gas Enterprise Pvt. Ltd (SAGE) will not be buying gas from Iran; rather, it is an international consortium for building of the pipeline. Focusing on a study on the Iran–India gas pipeline, according to T.N.R. Rao, the Chairman of

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the advisory board of SAGE, “The cost of landed gas through an undersea pipeline will be at least $2 cheaper than importing LNG, saving about $1 billion annually”. In a macroscopic point, the natural gas imported through the pipeline, i.e. from Iran to Oman and then Oman to India, would cost $5–5.50 per million British thermal unit at the Indian cost compared with LNG imported through ships which costs about $7.50 per MMBTU. The natural gas from other nations can also be sourced through the pipeline. Turkmenistan has a pipeline supplying gas to Iran in the North. Iran can use the Turkmen gas for its own use and supply equivalent volumes to India from its offshore fields. Likewise, India can get Azerbaijan gas [37] through swap arrangements with Iran. Likewise, spur, pumping and re-export arrangements can be possible so that India can get the energy resources from Qatar, Kuwait, UAE, Saudi Arabia and Qatar. In addition to SAGE, Russia has recently shown its interest for the construction of pipeline connecting Iran and India. In an initiation, in 2017, Russia and Iran signed a memorandum that envisaged Russian support for natural gas supplies from Iran to India. Russia’s Gazprom will construct the pipeline, said the Russian Energy Minister Alexander Novak in 2017. This initiation has led to a Russia and Pakistan memorandum in 2018 for implementing of an underwater gas pipeline from Iran to Pakistan and finally to India. This MoU, signed by Russian Deputy Energy Minister Anatoly Yanovsky and Pakistan’s Ministry of Energy Additional Secretary Sher Afgan Khan in Moscow implied revival of 2013 MoU, which was meant for the construction of similar pipeline. Russia and Iran are expected to sign a memorandum of understanding on Gazprom’s participation in the Iranian oil and gas sector. By the end of 2018, the parties were supposed to draft and sign the legal framework for the project. Indian, Pakistani, Russian and Iranian companies will be taking part in the project. According to Russian media, the pipeline is expected to be 1200 km (746 miles) long and will ship Iranian gas to India [38].

7.5 Russia–China–India Pipeline (RCI) With a liberal market policy on its energy export regime, Russia has developed several major LNG pipeline projects to pump natural gas to the Asian markets, which is in congruence to shifting emphasis in the energy sector globally. To pump its natural gas resources to India, Russia has some selective options to pursue. There are four route options for bringing Russian energy to India. Firstly, the 2600 km shortest pipeline can be constructed which will start from Russia’s western Siberian fields, via the Altai region and China’s Xinjiang Province, to Jammu and Kashmir [39], before finally reaching to New Delhi. Here, India can also start negotiating with Russia for the extension of a $30 billion gas pipeline that connects Russia and China, to India. If the proposed pipeline from Russia via China’s Xinjiang Province is materialized, it will be one of the most expensive gas pipelines in the world [40]. Secondly, a pipeline can come via Central Asian nations, Iran and Pakistan so as to reach western India. However, the route will be expensive when compared to shorter

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and cheaper Iran–Pakistan–India pipeline. But, Tehran may suggest India to take its natural gas through IPI rather than building such an expensive pipeline. Thirdly, develop a longest alternative route (6000 km)—from Russia to China, to Myanmar and finally into the North East India, thus bypassing the territory of Bangladesh. Fourth, the Russian pipeline that reaches Mazar-e-Sharif in Afghanistan can be extended to connect with the ongoing TAPI pipeline, so as making it Russia-TAPI (R-TAPI) pipeline. Other options are also being considered and negotiated between India and Iran. First, construction of an underwater pipeline from Iran to India via Oman and the Russian energy reaching to the Iranian soil will be pumped to the pipeline. Second, implementation of the potential North–South Transport Corridor, which will connect Russian energy to Azerbaijan, Iran, and India. Third, expansion of India–Iran–Afghanistan Trade Corridor to Russia through the Central Asia or Caspian underwater pipeline [41]. In a recent development, the Indian state-owned Engineers India Ltd (EIL) signed an agreement with the Russian company Gazprom in 2016 for studying various pipeline options, which will connect both Russia and India. It envisaged in roping of ONGC Videsh Ltd, GAIL India Ltd and Petronet LNG Ltd for the study. The longest route as discussed will cost close to $25 billion. The cost of transporting gas is expected to be $2 per million British thermal unit, according to the EIL. This MoU was signed in the presence of Prime Minister Narendra Modi and Russian President Vladimir Putin at the India–Russia Annual Summit on the sidelines of the 8th BRICS summit. However, the pipelines connecting Russia and India have their own costeffectiveness, political risks and topographical challenges. Transporting energy from Russia to India through pipelines (any route) is bit expensive than the other pipelines India pursuing. While the cost of transporting the natural gas through the IPI pipeline option is less than USD 1 per MMBTU, the same for the TAPI pipeline is $2 per MMBTU, and it would be about $4 per MMBTU for the Russia–India gas pipeline (any route). For the RCI pipeline, the route is likely to be challenging due to difficult terrains, environmental effects and security concerns. From the geographical perspective, around 35% of the pipeline route would pass through the mountainous terrains. From the environment perspective, the pipeline is strongly opposed by environmental activists and groups, since the Altai region is home to endangered and sensitive species [42]. From the security perspective, the pipeline would pass through the restive Xinjiang Uygur Autonomous Region of China. Likewise, the RTAPI pipeline would cross through militancy-affected Pakistan and Afghanistan. Yet, the recent breakthrough in the TAPI pipeline, where the wielding process has already been begun, seems positive as various stakeholders in Afghanistan and Pakistan are being consulted and seems they are convinced about the benefits accrued from the pipeline [43]. The pipeline (s) between India and Russia (and China) or through other means have several implications. First, once the RCI is materialized, India, like China, as a key driver of global energy prices, will have better bargaining power in the international LNG market. Second, it will promote economic cooperation between India and the Eurasian Economic Union. Third, energy trade would signal India’s readiness to prioritize its energy security along with geopolitical lines. Fourth, the pipeline

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will be a step forward towards for a larger presence in the Shanghai Cooperation Organisation (SCO) and establishment of a unified or integrated energy market that encompasses all the stakeholders of SCO. Fifth, energy trade will be a catalyst and a step forward for a broader Asian energy security structure. Sixth, it will create an opportunity for New Delhi to enhance its “Connect Central Asia” Policy. Seventh, against the backdrop of the Crimean crisis, and US–Russia imbroglio, there are grounds to import natural gas from Qatar, yet there are several limitations to this: overdependence on Qatari LNG is not accepted for India, as it will have to pay higher prices in the highly competitive natural gas fields of Qatar; Qatar is a strong ally of a superpower—the USA, for which New Delhi moves very meticulously for trade and investment in Qatar. Eighth, Russia is India’s most reliable and time-tested partner for trade, as compared to other major powers or energy-rich countries. Therefore, India has fairer chance of getting oil and natural gas blocks, and shale reserves, from Russia through a “nomination” basis, without going for open biddings. Ninth, Moscow’s involvement in the TAPI project through R-TAPI will accelerate the process of the ongoing TAPI project. Tenth, diversifying India’s suppliers by buying more oil from a potential and an energy-rich Russia, in turn, will contribute against geopolitical risks and security threats. An Assessment Implementation of TAPI project is a win-win situation for all the stakeholders. As opined by Gurbanguly Berdymukhamedov, “TAPI is designed to become a new and effective force for the realization of a modern architecture of global energy security, and a powerful driver for social and economic stability in the Asian region”. No doubt, the joint collaboration for TAPI brings a variety of latent benefits to the states involved. The attitudes of all the four stakeholders are in a positive direction today to complete this project as fast as possible, and thus a viable mission seems to be completed soon. However, the pipeline, which was initially expected to be operationalized in 2017, had been pushed back to 2018 and now to 2019. Recently, Afghanistan President Ashraf Ghani said that the pipeline may not be completed in a stipulated time, owing to violence and insecurity in the region [8]. Nonetheless, the success of TAPI project will definitely have a deep impact on India’s energy security, regional cooperation and international energy price regulations. In the context of MBI, the project is not without trouble because of some trade issues as raised by Dhaka and consequent delays. However, any further delay of implementation will cost a lot since Myanmar authorities have told both the countries to make up their minds fast in the juncture of growing demand and competition for Myanmar’s natural gas resources. The IPI is expected to strengthen India’s energy quest; but it has become the victim of US–Iran imbroglio and insecurity challenges in Pakistan. Without Pakistan, the subsea pipeline is feasible, but same US–Iran conflicts and India’s increasing relationship with the USA limiting the process. In the context of Russian pipeline—reaching to India through China or Central Asia, no major progress has been made, and all these are largely due to difficult terrain and long routes involved in the transportation process. Further, whichever the route the pipeline

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passes, it is either China or Pakistan that will come across, and India is not comfortable with these countries because of political and security aspects involved. India has territorial disputes with both China and Pakistan, and wars have been fought with these countries. Apart from the territorial and political issues, the cross-border terrorism of Pakistan and internal militant acts in the country, and restive Xinxiang Province, compound the problem. Further, the Chinese support to Pakistan on the contentious issues casts shadow over the pipeline projects. However, there are recent initiatives between India and Russia for more pipeline projects such as a Joint Research Group has been created between Gazprom and Indian companies, which have identified 10 pipeline routes that included three routes on the western side of India and seven routes on its eastern side for the supply of natural gas, and Gazprom has also extended the offer to construct IPI pipeline [44]. However, the details of these plans are yet to be concretized and made public. End Notes 1.

‘India’s Current status on Natural Gas’, SAGE: Middle East to India Deep Water Gas Pipeline, http://www.sage-india.com/index.php?option=com_con tent&view=article&id=71&Itemid=77. 2. By 2040, global gas consumption will be 4 billion tonnes of oil equivalent per year, 25% of total primary energy consumption, in Energy Research Institute, 2014, ‘Global and Russian Energy Outlook up to 2040’, Moscow, Russian Academy of Sciences, http://in.rbth.com/economics/2014/04/02/india_explor ing_new_investments_in_oil_and_gas_projects_in_russia_34199.html. 3. ‘India gets cheapest LNG as Russia’s Gazprom begins supplies’, June 4, 2018, The Times of India, http://timesofindia.indiatimes.com/articleshow/ 64453406.cms?utm_source=contentofinterest&utm_medium=text&utm_cam paign=cppst. 4. Statement of Dharmendra Pradhan, while receiving the “LNG Kano”, the cryogenic ship carrying the first cargo of LNG under a 20 year deal at Dahej (Gujarat) on 4 June 4 2018, and the day was celebrated as the “golden day” for India’s energy security map, in Dutta, Sanjay, 2018. ‘India balances US energy ties with $25 billion Russian gas deal’, The Times of India, June 5, http://timesofindia.indiatimes.com/articleshow/64453406.cms? utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst. 5. Embassy of India, Ashgabat, Turkmenistan. 6. The Economic Times, 9 December 2015. US Geological Survey, 7 December 2015. 7. Sometimes Yashlar is identified with Galkynysh. 8. US Energy Information Administration, US Geological Survey, 7 December 2015. 9. The Hindu, 13 December 2015. 10. Natural Gas Asia, 20 December 2015. 11. The Dawn, 16 December 2015. 12. NDTV News, 13 December 2015.

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13. The Economic Times, 9 December 2015. 14. The Turkmen government in 2009 concluded a $10 billion service contract for Galkynysh with a consortium headed by CNPC and including LG International, Hyundai Engineering and Petrofac. Galkynysh production started 4 September 2013. Turkmenistan will export 30 bcm/year to China for 30 years under agreements reached at the time. The two countries, however, have set a target of bringing annual gas deliveries up to 65 bcm/year, 30 bcm from Galkynysh and the rest from the Bagtyyarlyk PSA and Turkmengaz’ own production. 15. International Business Times, 23 November 2015. 16. Embassy of India, Ashgabat, Turkmenistan and NEWEUROPE, 14 December 2015. 17. Natural Gas Asia, 20 December 20 2015. 18. Natural Gas Asia, 12 December 2015. 19. The Indian Express, 14 December 2015. 20. India has been the 62nd country to ratify the agreement. “India Ratifies the Paris Climate Agreement: This is What it Means”, 4 October 2016. www.thebetter india.com/70499/paris-agreement-india-united-nations-conveention/. 21. Natural Gas Asia, 26 November 2015. 22. ‘Regional-Economic-Cooperation-Creates-the-TAPI-Pipeline’, http://www. economywatch.com/features/Regional-Economic-Cooperation-Creates-theTAPI-Pipeline1204.html. 23. It implies providing energy services in consonance to capacity development and productive uses of energy resources for income generation, thus improving household living standards and increasing capacity to pay for energy services. 24. ‘Bangladesh approves India-Myanmar gas pipeline through its territory’, 2010. http://www.gasandoil.com/news/south_east_asia/dc209a1df503b3750d ea0739653a757e. 25. Gas in Myanmar, World Energy Council, https://www.worldenergy.org/data/res ources/country/myanmar/gas/. 26. ‘India-Bangladesh-Myanmar pact on gas pipeline’, http://www.consumercourt. in/product-services/21904. 27. ‘Myanmar-Bangladesh-India Gas Pipeline Project’, Ministry of Petroleum and Natural Gas, Government of India, http://petroleum.nic.in/ng.htm. 28. ‘India, Bangladesh, Myanmar Gas Pipeline Project Set to be Revived’ http:// www.safan.com/safannews/pplnews.htm. 29. Energy Information Administration, 2007. 30. Both Iran and Pakistan signed a preliminary agreement in 1995 for the construction of a natural gas pipeline linking Karachi with the South Pars natural gas field. 31. ‘Iran is offering to cover 60% of the construction costs of the pipeline, Project Focus: Iran-Pakistan-India Gas Pipeline’, Gulf Oil & Gas, https://www.gulfoi landgas.com/webpro1/projects/3dreport.asp?id=100730. 32. United Press International, 2008. 33. ‘Project Focus: Iran-Pakistan-India Gas Pipeline’, Gulf Oil & Gas, https://www. gulfoilandgas.com/webpro1/projects/3dreport.asp?id=100730.

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34. Initially, Iran will transfer 30 million cubic meters of gas per day to Pakistan, but will eventually increase the gas transfer to 60 million cubic meters per day, in, ‘Project Focus: Iran-Pakistan-India Gas Pipeline’, Gulf Oil & Gas, https:// www.gulfoilandgas.com/webpro1/projects/3dreport.asp?id=100730. 35. ‘Iran-Pak gas pipeline project still alive: FO’, https://nation.com.pk/24-Feb2018/iran-pak-gas-pipeline-project-still-alive-fo. 36. Sanctions imposed on 2008, in ‘India should revive IPI gas pipeline: panel’. 2017. Livemint, March 19. https://www.livemint.com/Industry/JRiA9MVW3 VCbuRsUXV0x8O/India-should-revive-IPI-gas-pipeline-panel.html. ‘India should revive IPI pipeline: Parliamentary Panel’ The Economic Times, March 19, 2017, https://economictimes.indiatimes.com/industry/energy/oil-gas/indiashould-revive-ipi-pipeline-parliamentary-panel/articleshow/57716034.cms. 37. ‘Connectivity Central to Iran-India Future Ties’, Financial Tribune, February 25, 2018, https://financialtribune.com/articles/economy-domestic-economy/ 82456/connectivity-central-to-iran-india-future-ties. 38. Statement of Mani Shankar Aiyer, in, Latha Jishnu, 4 July 2015, Iran-India gas pipeline laid low by geopolitics, Down To Earth. https://www.downtoearth.org. in/news/iranindia-gas-pipeline-laid-low-by-geopolitics-43121. 39. ‘Undersea Iran-India gas pipeline, avoiding Pakistan, can bring cheaper LNG to India, says study’, Firstpost, Sept6, 2017, https://www.firstpost.com/bus iness/undersea-iran-india-gas-pipeline-avoiding-pakistan-can-bring-cheaperlng-to-india-says-study-4013517.html. 40. ‘Undersea Iran-India gas pipeline, avoiding Pakistan, can bring cheaper LNG to India, says study’, Firstpost, Sept6, 2017, https://www.firstpost.com/bus iness/undersea-iran-india-gas-pipeline-avoiding-pakistan-can-bring-cheaperlng-to-india-says-study-4013517.html. 41. ‘Undersea Pipeline, Indians push for undersea gas pipeline from Iran’, PRESSTV, September 6, 2017, https://www.presstv.com/Detail/2017/09/06/ 534212/Iran-India-gas-pipeline-Pakistan-study. 42. ‘Russia, Islamabad sign MoU to build gas pipeline from Iran to Pak and India’, The Business Standard, September 28, 2018, https://www.business-standard. com/article/international/russia-islamabad-sign-mou-to-build-gas-pipelinefrom-iran-to-pak-and-india-118092800044_1.html. 43. ‘India, Russia to study building $25 billion pipeline’, The Economic Times, October 16, 2016, https://economictimes.indiatimes.com/articleshow/548 78729.cms?utm_source=contentofinterest&utm_medium=text&utm_cam paign=cppst. 44. Russia has assured India it would facilitate consultations in creating India’s special relationship with the Eurasian Economic Union, in ANI, 2014. ‘India, Russia Display ‘Druzhba–Dosti’ during Putin’s Visit,’ Yahoo! News, December 11, https://in.news.yahoo.com/india-russiadisplay-druzhbadosti-during-putins-visit-151643220.html. 45. Aljazeera News, Dec 13, 2015.

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25. Bhutta, Zafar. 2012. Bangladesh decides to join TAPI gas pipeline project’, The Express Tribune, June 7. 26. Imam, Badrul. 2009. Myanmar gas bypasses India, Bangladesh. The Daily Star, December 17. 27. Srivastava, Siddharth. 2010. India, Bangladesh Look to Turn a Corner. http://www.atimes. com/atimes/South_Asia/LA16Df01.html. 28. Ministry of Petroleum and Natural Gas, 2018–2019, Annual Report, Government of India, pp. 72–73. 29. Fallahi, Ebrahim. 2018. ‘IP gas pipeline: A fading opportunity for Pakistan. Tehran Times, March 3. https://www.tehrantimes.com/news/421743/IP-gas-pipeline-A-fading-opportunityfor-Pakistan. 30. ‘India should revive IPI gas pipeline: panel’. 2017. Livemint, March 19. https://www.livemint. com/Industry/JRiA9MVW3VCbuRsUXV0x8O/India-should-revive-IPI-gas-pipeline-panel. html. 31. Asghar, Zahid and Nazuk, Ayesha. 2007. Iran-Pakistan-India gas pipeline—An economic analysis in a game theoretic framework. Pakistan Development Review 46(4): 537–550. https://www.researchgate.net/publication/215830024_Iran-Pakistan-India_Gas_Pipeline-An_ Economic_Analysis_in_a_Game_Theoretic_Framework. 32. Verma, Shiv Kumar. Energy geopolitics and Iran–Pakistan–India gas pipeline.https://www.sci encedirect.com/science/article/pii/S030142150600437X. 33. Dietl, Gulshan. 2017. India and the Global Game of Gas Pipelines. London, Routledge, pp. 14 & 18. 34. Mazhar, Muhammad Saleem and Goraya, Naheed S. ‘Challenges in Iran-Pakistan Gas Pipeline. https://www.ndu.edu.pk/issra/…/08-Challenges-in-Iran-Pakistan-Gas-Pipeline.pdf. 35. Ramesh, M. 2018. The Iran-Pakistan-India gas pipe-dream’, Business Line, March 12, https://www.thehindubusinessline.com/economy/the-iran-pakistan-india-gas-pipe-dream/ article20694307.ece1. 36. Ramesh, M. 2018. The Iran-Pakistan-India gas pipe-dream. Business Line. March 12. https://www.thehindubusinessline.com/economy/the-iran-pakistan-india-gas-pipe-dream/ article20694307.ece1. 37. Dietl, Gulshan. 2017. India and the Global Game of Gas Pipelines. London: Routledge. 38. Paraskova, Tsvetana. 2017. Russia’s Gazprom To Help Build Iran-India Gas Pipeline, oilprice.com, November 1. https://oilprice.com/Latest-Energy-News/World-News/RussiasGazprom-To-Help-Build-Iran-India-Gas-Pipeline.html. 39. Oxford Analytica. 2014. India Turns to Russia and China for Energy Security, 2 June 2014. https://www.oxan.com/analysis/dailybrief/samples/IndiaRussiaChinaGas.aspx. 40. Saikia, Siddhartha P. and Siddiqui, Huma. 2014. Gas pipeline to China: India to talk to Russia for extension. Financial Express. June 24. https://www.financialexpress.com/archive/gas-pip eline-to-china-india-to-talk-to-russia-for-extension/1263662/. 41. Pradhan, Sanjay Kumar. 2018. Indo-Russian energy cooperation: geopolitics in a fluid matrix. Economic and Political Weekly 53(6): 55–56. 42. Oxford Analytica. 2014. India Turns to Russia and China for Energy Security. 2 June. https:// www.oxan.com/analysis/dailybrief/samples/IndiaRussiaChinaGas.aspx. 43. Shardul. 2015. Afghan President Ghani Discusses TAPI Project with Tribal Leaders. 20 December. Natural Gas Asia. http://www.naturalgasasia.com/afghan-president-ghani-discus sestapi-project-with-tribal-leaders-17289; Khaama Press. 2015. Pakistan Would Talk to Afghan Taliban for TAPI’s Security. 12 December. http://www.khaama.com/pakistan-would-talkto-afg han-taliban-for-tapis-security-4382. 44. Petleva, Vitaly and Toporkov, Arthur. 2019. Interview of M/o Petroleum & Natural Gas to Vedomosti, Embassy of India, Moscow, Russia. September 4. https://indianembassy-moscow. gov.in/press-releases-04-09-19.php.

Chapter 8

Russia: Energy Surge and Geopolitical Milieu

The chapter explains oil and natural gas surge in Russia after the disintegration of Soviet Union, Moscow’s ‘Asia Pivot’ Approach, Russia in India’s hydrocarbon map, implications of energy pipeline, Crimea War and western sanctions against Russia, volatility of crude price and the matrix of India–USA–Russia–China energy geopolitics. The chapter attempts to discuss all these aspects from the domestic policies of Russia and international developments. After the disintegration of Soviet Union, Russia had lost its levers in global geopolitical developments because of its economic crisis, declining oil production and loss of energy market. But the rise of Putin as the President of Russia in 2000 and assertive approach of the Russian government have led to boom in the Russian oil and natural gas sector. The explorations from the shale basins, Arctic and the East Siberian regions have added new dimensions to Russia’s traditional potentials. Hence, India, like all other major oil-consuming countries, has turned to Russian market for a more reliable and uninterrupted supply of energy. India’s trade and investment in the Russian energy assets have increased since the late 1990s. But, the Russian ‘annexation’ of Crimea and Russia–Ukraine skirmishes have enraged the USA and its allies which have imposed sanctions (economically and diplomatically) against Moscow. This conflict has proved as litmus test for India to maintain a balancing role with Russia vis-à-vis the West in the global geopolitics. Further, the chapter explains how the decline of crude oil price in the last five years turned as a disincentive for Indian investment in Russia. Yet, booming energy sector of Russia and sanctions by the USA and some of its allies against Moscow provides a plethora of opportunities for Indian oil companies where Russia has complimented India’s interest through its ‘Asia Pivot’ approach. Nevertheless, increasing competition for energy resources in Russia and US shale energy as an alternative to the Russian energy has drawn some introspection in the existing Indian foreign policy and energy diplomacy.

© Springer Nature Singapore Pte Ltd. 2020 S. K. Pradhan, India’s Quest for Energy Through Oil and Natural Gas, https://doi.org/10.1007/978-981-15-5220-5_8

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8.1 Russia—The World Energy Leader? On the night of 25 December 1991, the then USSR President Mikhail Gorbachev went on National Television to make a shocking announcement, where he referred that the USSR would shortly cease to exist: “We have everything-land, oil, natural gas and other natural resources. However, we have been living much worse than the people in the industrialized nations and lagging behind them. There have been mistakes, which we could have averted, and many of the things we did in past could have been done better. The old system fell apart before the new system set to work. But, one day our common efforts will bear fruit and the nations will live in a prosperous society” [1]. Six days later of his announcement, on December 31, the Soviet Union formally ceased to exist. His statements in the national television were the indicatives of how his country was passing through a troubling phase. Yet, he was optimist of a prosperous Russian resource economy in near future. In the late 1980s, Gorbachev had led the giant West Siberian operation, the last great industrial achievement of the Soviet period. During the period, oil production reached to 8 million barrels per day (bpd)-equal to rival Saudi Arabia’s total output [2, p. 22]. But over supply and reduced demand in the world energy market triggered in collapse in the oil price, which drastically reduced the hard currency earnings that the country desperately required to pay for imports, and the chaotic barter became the order of the day. The collapse in the oil price was the final blow on the Soviet energy industry and declining of investment in the energy infrastructure. Along with this problem, other problems like stealing of Soviet oil and selling it in hard currency in the black markets of the West, oil workers’ strike, shutting down of oil fields, lack of foreign investment, divert of oil revenue for the other sectors of the economy had paralysed oil and natural gas industry in the country. Under these chaotic situations, no one even could know who really owned the Russian oil. The production plummeted by almost 50%—a loss of more than 5 million barrels a day [3]. In spite of its severe decline in production in the late 1980s and early 1990s, by the mid-1990s, the oil export revenues accounted for as much as two-thirds of the Russian hard currency earnings. But disruptions in the global energy market and starved investment further created a situation where oil output started to slip and then collapse towards the end of the 1990s. From the brink of collapse, the new Russia has emerged with the recovery of oil revenue and Vladimir Putin’s ascendency to power in 1999 and subsequently 2000. Putin argued that Russia’s oil and gas sectors were key to economic recovery of the country, its entry into the world economy and making Russia a great power in global geopolitics. Given their central strategic significance, the oil and natural gas sectors and resources brought under the aegis or direct control of the state [2, p. 37]. Since 2000 Russia has been back with the oil and natural gas explorations and productions, along with unconventional shale exploration. Russia has large shale gas reserves of 8 TCM, which are concentrated in the Bazhenov reservoir of West Siberia. However, Gazprom has not revolutionized its shale reserves, with the anticipation that the future exploration would be much cheaper to produce than the present

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level [4]. Like supply, country’s oil industry today has been well integrated technologically with the rest of the world. Once Vladimir Putin was asked if Russia is an energy super power. He replied, “I don’t like the phrase Super Power, which is characterized with the Cold War mentality. We have greater potentialities than almost any other country in the world, and if put together, Russia’s energy potentials—oil, natural gas, shale and nuclear, our country is the unquestionable leader” [5, 6]. It is definite that the period of Putin has begun like Peter: The Great, whom he admired, and who vowed to restore his country as a “power of consequence”, and Gazprom as “Leviathan” [7, p. 15]. Russia today constitutes 6.1% (106.2 tmb/14.6 tmt) of the total oil reserves in the world and ranked seventh with the global oil reserves after Venezuela (17.5), Saudi Arabia (17.2), Canada (9.7), Iran (9.0) and Iraq (8.5).1 Since 2007, Russia spent a staggering of $160 billion in consolidating and restructuring Russian oil companies. As a payoff, Russia’s oil output has increased from 6 million barrels per day (bpd) in 1998 to 10 million bpd in the first decade of the twenty-first century and 11,438 tbd in 2018 which was 12.1% of the global productions.2 In 2009, Russia surpassed Saudi Arabia to become the world’s top producer, and today, it is the third largest producer after the USA (16.2%) and Saudi Arabia (13%). The estimates of the Russian oil reserves do not even account Arctic and shale oil deposits, which taken together would increase Russia’s reserves to over 200 billion barrels, i.e. 10% of the world total [7, pp. 91–92, 95], and it is projected that the Arctic region could generate about 30% of Russia’s oil revenue in ten to fifteen years [8, p. 134]. The gas fields of Siberia have been yielding 50 bcf per day of the natural gas for the last two decades, and the major importing countries include European countries like Germany, Poland, Finland, Romania, Bulgaria and Serbia—which depend on Russia for about half of their imports. The boom in production is only a beginning of what Russian can do in future explorations. Russia sits on 1600 tcf of natural gas, roughly one-quarter of the world’s known natural gas resources, excluding its nonconventional gas resources [6, pp. 107–108]. Russia has the largest reserves of natural gas (38.9 tcm/1375.0 tcf) that constitutes 19.8% of the global natural gas reserves, and second largest producer with 669.5 bcm or 575.6 mtoe (17.3%) after 831.8 bcm or 715.2 mtoe (21%) of the USA,3 which indicate that the sanctions imposed by the USA and its allies on Russia have not affected the oil industries in a significant way and Moscow has managed the global geopolitics in a very tactical way by focussing more on the other major oil-consuming countries in the world, particularly Asia. From the energy geopolitics perspective, Russia, in past, lost much of its global claims with the dissolution of the Soviet Union, and today, it is making an attempt to re-emerge as an energy power after successfully reversing a production slump in the 1990s. Buoyed by its vast energy reserves, Kremlin is once again flexing its muscles abroad and is assertive on global geopolitical issues. “Russia must aspire to claim world leadership in the realm of energy”, Putin said in the Security Council of the UN in 2006 [9, p. 23]. For Kremlin, energy security has enabled the country to deal with its national security issues in a more realistic and pragmatic manner, and it did not shy away from making energy as a significant tool of its diplomacy and foreign policy discourse. Since energy export constitutes about 30% of Kremlin’s budget and the state sharing of oil production has doubled between the period 2006 and

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2010 [10, pp. 22–23], Russia has been back from the brinks of further collapse and Putin is in charge [9, p. 17]. Russia is now seeking to find a new place in the global architecture and since 2000, under the leadership of Putin and Dmitry Medvedev (the former President), Russia has pursued an increasingly assertive, if not aggressive, foreign policy [10, p. 24]. America acts vigorously to enforce its global objectives in accordance with the principle that Washington had the ‘right to use military forces’ to defend its vital interest by ensuring access to key energy markets, supply routes, strategic resources and geopolitical regions in the world by ignoring Russian assertion in the global power architecture and its traditional sphere of influence across its borders [11]. On the other hand, Russia uses its oil diplomacy to reverse unfriendly Cold War rhetoric with the European nations particularly the West European nations, punish the errant child, reward friendly regimes and punish the hostile ones. About 40% of hydrocarbon requirement of Germany is met by Russia; Moscow has South Stream project is on hold, so as not to give energy autonomy to Turkey which is a NATO member and US ally; and stopped supply of energy to Ukraine for being closer to Washington and unfriendly to Moscow [10, pp. 22–48]. It is apt to say what Dick Cheney, the former Vice President of the USA, warned Russia for using energy as a tool of intimidation and blackmail [9, p. 23]. However, irresistible Russia scouring the world in search of power, at least influence, through its role of forging alliances, rekindling of old ones, filling the vacuum which was left by an in-ward looking West and specifically, targeting the nations which have bitter relations with the West.4

8.2 “Asia Pivot” Perspective Along with Russia’s geopolitical and geo-economic approach towards the US and its allies and Europe, Moscow is now extensively looking towards Asia, the development which is broadly interpreted under the rhetoric of “Asia Pivot” or “Looking East”. Under the spectrum, Russia is largely looking towards the major oil importing nations in Asia such as India, China, Japan and South Korea. According to Russia’s “Energy Strategy 2020”, the country plans to increase to one-third of its oil and 15% of its natural gas to Asia by 2020 [13]. Further, its policy of “Russian Energy Strategy up to 2035”, announced in 2015, synchronizes to Asia Pivot, access priority to the Asia–Pacific and thus Export diversification [8, p. 125]. Russia has been reinvigorated its efforts in supplying liquefied natural gas (LNG) to the global natural gas market, where the Russian energy giant Gazprom is expected to be “at the heart of the global gas industry” [14]. Apart from these developments, there are certain specific reasons for which Russia has been looking for the Asian market to supply its thriving energy productions, expand its foothold in the rapidly growing Asian market, shaping a geopolitical relations, and security in energy supply. First, in addition to the existing markets, the surge in oil and natural gas production in Russia requires new markets and larger supplies bases. Second, the Russian energy, till date, has been Europe-bound, and it intends to diversify its oil and natural gas supply, enrich with foreign investments and expand its energy basket. Third, Russia today is in dire

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need of foreign investments for its oil and natural gas projects so as to ensure that its production does not fall below the existing levels. So, India poses as a potential destination and a partner to rely for the Russian energy sector. Fourth, geopolitically and strategically, Russia wants to grow and nurture a new relationship with Asia so as to establish a “Resource Hinterland” [15, p. 132]. Fifth, for the last couple of years, Russia has been in odds in the international energy market due to the USA and some of its western allies sanctions against Moscow and its energy assets. The South Ossetia crisis and subsequent Russian intervention, annexation of Crimea, Moscow’s support to Assad government in Syria, its closeness with Tehran, etc., have brought both Russia and the USA and its allies at loggerheads and thus reversal of Russian economy. Sixth, since the long and large productive oil and natural gas fields in West Siberia are declining, the country is now looking for new oil and natural gas reserves in order to remain an important energy supplier; therefore, the East Siberian and the Far East regions of Russia are the obvious and immediate targets of research, exploration and production. By 2009, the East Siberian and Far East regions constitute 13.5 and 19% of country’s total oil and natural gas reserves [15, p. 135]. Significantly, it is expected that the East Siberian region constitutes the potential reserves up to 75 billion barrels which is equal to a quarter of the reserves of Saudi Arabia. Potential oil and gas production bases in these regions include Sakhalin, Yakutia, Irkutsk region, Krasnoyarsk Krai, from where the oil supply to the Asian market will be easier, faster and less expensive. Hence, India’s investment in the development of the region and oil fields owes significance for the Russian energy interest. Seventh, there has been a shift in Moscow’s policy towards the East Siberian, and Far Eastern regions in the country which is largely due to Putin’s interest for the development of these areas. The Soviet Union or Russia which had largely neglected these regions, the Putin government has attempted to reverse “Eastern Stepchild” attitude of the past. Vladimir Putin has frequently travelled to these areas, tries to resolve their issues and looking for the key Asian partners like India and China for energy import and development and investment in the still-to-be-developed oil fields in these regions. All these are in congruence to what the policymakers and think-tanks in Russia argue that without developing energy resources in these regions, the existing social, economic and demographic problems, such as high levels of unemployment and the migration of the skilled workers, will prevail, which could pose a serious threat to Russia’s national security, national unity and territorial integrity. Russia, under Putin, is well aware of the fact that the shifting of global economic balance of power is in favour of Asia and construed that the economic integration with this region is the key to Russia’s long-term economic growth and geopolitical interests. Its pursuit of closer integration with the Asian market hinges on Moscow’s energy export goals and its desire to become a major supplier of oil and natural gas to the fast-growing economies of Asia and Asia–Pacific. It is an established fact that the Asian investment is crucial for Russia’s ability to explore and tap hydrocarbon resources in its territories [16] which can be best interpreted under “Asia pivot” and “strategic energy alliance”. Engaging with the Asian countries bilaterally and multilaterally, the Russian oil and natural gas goliaths such as Gazprom and Rosneft have radically strengthened their positions in the highly undiscovered East Siberian

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and Far East Russia [17]. Congruence to this, Russia has streamlined its plan to expand the East Siberia–Pacific Ocean oil pipeline’s annual capacity to 80 million tonnes (1.6 million barrels per day [mbd]) by 2020, from its current capacity of 1 mbd [18], with a specific intention to increase the share of total Russian oil and natural gas products going to Asia, i.e. increasing oil supply from 12 to 23%, and that of natural gas from 6 to 31.5% by 2035; taken together, which would mean a rise of about 27% from the existing level [19, 20]. It is an obvious fact that there are multiple Asian stakeholders and aspirants to Russia’s Asia Pivot strategy. For Russia, China is a major supply destination, and the 30-year natural gas deal between the Gazprom and the China National Petroleum Corporation (CNPC) marks the culmination of decadelong negotiations, whereby Russia has offered for 10% of its Vankor oil field, worth $1 billion, to the CNPC [19]. In the midst of tough bargaining and fierce competition, Japan too offered some attractive proposals and lucrative business ideas when Russia was debating for the relative merits of constructing a pipeline from East Siberia to the Pacific coast (Angarsk–Daqing); Tokyo offered to pay Moscow $5 billion for the pipeline construction and $2 billion towards the oil field development. In 2014, the Russian Parliament wrote off 90% of North Korea’s debts to Russia, which was $10 billion, in exchange for latter’s agreement to build a pipeline that would run from Sakhalin to South Korea through North Korea [21]. At the same time, Rosneft is working with South Korea by allowing the Korea National Oil Corporation (KNOC) to participate and share with a 40% stake in the development and exploration of West Kamchatka shelf. When the UN sanctions waived off, Russia swiftly moved to invest billions of dollars towards the upgradation and expansion of the Iranian energy infrastructure. In addition to these steps, in 2015, Russia signed a ten-year liquefied natural gas (LNG) agreement with Pavilion Gas, Singapore’s state-owned company, to accelerate gas supply [22]. The visit of Igor Sechin, the chief executive officer of Rosneft, to India, Japan, South Korea, Philippines and Vietnam, in 2014 was one of the most comprehensive initiatives undertaken by Moscow to streamline energy trade and investment in the Asian continent. Most recent developments, such as the Crimean crisis, economic sanctions against Russia by the USA and some of its allies, Russia’s uneasiness with the West, the economic slowdown in China and Europe, and Moscow’s cancellation of the South Stream natural gas pipeline project with Turkey, have created opportunities for Asian countries to look for deepening trade and expanded investment in the oil and natural gas sectors that includes shale energy as well. Hence, Russia has proved that it has other export baskets, besides Europe and the USA (US), and is assertively looking for expansion and consolidation of its footprint in the Asian markets in terms of export stability and market diversification.5 The visit of Dmitry Rogozin, Deputy Prime Minister of Russia, to India on 10 May 2017, and his meeting with Narendra Modi, the Prime Minister of India, revealed the gravity of engagement of both the countries for an early implementation of ongoing projects.

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8.3 Trade and Investment Potentials, with a Brighter Prospect Russia has been India’s time tested partner in the oil and natural gas sector. New Delhi’s historic energy relationship with Moscow goes back to 1970s when a team of Soviet oil and natural gas experts helped ONGC to explore oil in the Indian territories. So, the joint efforts led to a discovery of Bombay High offshore, which even today remains India’s biggest oil and natural gas field. Both the countries today have strengthened their mutual cooperation. The ‘Energy Bridge’ has become a necessity, and the mutual engagement has turned much promising today than before. India imports 1.4 million tons of oil from Russia every year which is about one percent of its global imports and wants to increase oil import from Russia, and substantially revise the existing energy basket [23]. In a landmark development, a long-term agreement on LNG supplies has been signed between the Gazprom and Gas Authority of India Ltd (GAIL) in June 2014, under which Russia will export 2.5 million tonnes of natural gas per year, worth of US$ 2 billion per annum, to India for a period of 20 years [24], and as per the agreement, the first cargo of Russian LNG was received by the Indian government on 4 June, 2018, at Dahej in Gujarat [25, p. 76]. Russian natural gas producer Novatek and Petronet LNG Ltd of India has signed a pact for LNG supply and joint development LNG fields, and India is looking for a long-term contract with Novatek [26]. Along with this progress, GAIL is looking for an opportunity to join for a 10% investment in the Arctic LNG-2 [23]. As a trend, in the context of new projects, the Indian companies first make investments and then get long-term contracts. This means more the level of investment in the oil and natural gas projects in Russia, more the number of offtake contracts for India. India has already signed some long-term contracts with Russia and Qatar on different natural gas fields, and the proposed investment in Arctic LNG-2 with Russia is in congruence to India’s desire for an increasing share of natural gas in its energy basket. This is in consonance to India’s effort to reduce its oil imports from existing 80 to 67% by 2022 and increase of natural gas in the country energy mix, i.e. from 6 to 15% by 2030, where Moscow can help New Delhi to be less dependent on oil resources, as said by the Indian Minister of Petroleum and Natural Gas Dharmendra Pradhan.6 The Putin government has also streamlined more shipment of Russian LNG through the tankers, gas-swap and natural gas pipelines between India and Russia [27]. India has stakes in the form of investment in the Russian oil and natural gas assets. It has invested $15 billion in oil and natural gas projects in Russia, which is the largest overseas investment in the oil and natural gas sectors abroad [23]. The OVL is the largest investor with $8 billion investment, of which a $2.5 billion investment is made in Sakhalin-1 (Offshore) only,7 a large-scale shelf development project in Russia, which is being implemented under a production-sharing agreement.8 The Sakhalin-1 (Offshore) has been the landmark project that has opened the doors for more investments, and New Delhi is now looking for investment and participation in Russia’s Sakhalin-3 project. Like Sakhalin-1 (Offshore), agreement has been signed between a consortium of Indian companies such as Oil India Limited (OIL), IOCL,

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Bharat Petro Resources Ltd (BPRL) and Rosneft for acquiring a 29.9% share in Taas– Yuryakh9 and 23.9% share in Vankorneft—a subsidiary of Rosneft. In the Vankroneft, the OVL also has 26%. Further, in 2015, the OVL acquired 15% in Rosneft’s secondbiggest oil field, Vankor, for 8390 crore deal, making it OVL’s fourth-largest oil block acquisition in recent times. The field, which has a recoverable reserve of 2.5 billion barrels, is likely to export 3.3 million tonnes of crude oil to OVL per year [28]. In the project License 61, the OIL has 50% share, which is equal to Russian company Petroneft’s share. In the Shakhalin-1 (Offshore), the OVL has 20%, Exxon Mobil— 30% (Operator), Sodeco—30%, SMNG—11.5% and RN Astra—8.5% [25, p. 78]. Further, the OVL has explored resources from the Magadan blocks (2 and 3) in the northern part of the Sea of Okhotsk. In 2013, Rosneft offered Indian government for stakes in its existing ten blocks in the Barents Sea and Black Sea [29]. However, the OVL has been examining the viability of these offers and profitability of the blocks. New Delhi is exploring the opportunities to invest approximately $1.5 billion in the Russian Yamal Peninsula, which has one-fifth of the global natural gas reserves, and in the process of acquisition, it is expected to compete with Japan to acquire a 9% stake in the Yamal LNG. For the financial transaction and facilitation, the OVL has signed agreements with Sistema, which is Russia’s biggest public financial corporation, for “potential transaction” stakes in some of the Russian refineries such as Russneft and Bashneft. India is seeking tax breaks on a projected 49% stake in the Yurubcheno–Tokhomskoye GreenField project in Eastern Siberia [30], and it is expected that New Delhi can best bargain with Moscow today due to the USA and its allies’ economic sanctions against Russia and the plummeting value of the Russian rouble. Crucially, in 2014, Rosneft expressed its intention to join OVL in its yet-to-be-built LNG plant in the Russian Far East. There is the proposal for potential shipment of East Siberia–Pacific Ocean (ESPO)’s oil blend to Indian Oil Corporation (IOC) [31] and creation of an Indo– Russian petrochemical joint venture in Gujarat, which is estimated at $450 million, with an annual capacity of 100,000 tonnes of finished products [32]. To streamline cooperation, OVL has signed a memorandum of understanding (MoU) with Rosneft company to streamline joint collaboration in research, exploration, assessment and production of hydrocarbon on the Russian continental shelf [33]. As India invests in Russia, so is Russia in India. Russia’s Rosneft-backed Nayara Energy Ltd. has investment about US$ 13 billion in Vadinar refinery at Gujarat in India, which is the largest FDI investment in the oil and natural gas sector of India [25, p. 76]. Further, Rosneft has signed a deal to buy a 49% stake in Essar Oil of India, having the worth of $3.2 billion, and a ten-year oil delivery contract has been agreed upon between these two companies. Accordingly, Essar Oil will buy 200,000 bpd, i.e. 10 million tonnes a year, worth of $10 billion, from Rosneft for a period of ten years [34]. This is the second-largest contract since Reliance Industries signed a 15-year deal to procure 300,000 bpd of crude oil from Venezuela. Due to ongoing US–Iran tensions and sanctions on Iran, Essar may cut imports from Iran and fill this gap with the Russian oil since one-fourth of company’s current needs is met with the Iranian crude to run its 400,000 bpd Vadinar refinery in Gujarat [28]. Apart from these two companies, IOC refinery has bought one million barrels of medium-sour crude from

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Litasco,10 an international marketing and trading company of LUKOIL, which will be processed at its Panipat refinery in Haryana [35]. Both Rosneft andGazprom in recent times have expressed their interest to increase crude oil and LNG supply to India, respectively [36]. The Narendra Modi government, since it came to power in 2014, is taking so much positive steps in streamlining energy cooperation in its bilateral relationship with Russia. The fifteenth India–Russia Annual Summit in New Delhi in December 2014 that highlighted Arctic Shelf development was a step forward to the MoU signed between OVL and Rosneft at St. Petersburg in May that year, which had set the ground for cooperation between India and Russia. Further, Arctic exploration is significant for India to strengthen its economic, political and geopolitical interests in the region [37]. In addition to Arctic LNG-2, Gazpromneft, the fourthlargest oil producer in Russia is much enthusiastic in engaging Indian companies in various Arctic projects. During the 2014 meeting, both Narendra Modi and Vladimir Putin evidently indicated their interest in energy cooperation and joint exploration of oil and natural gas assets, feasibility studies, construction of pipelines, transportation, establishment of petrochemical plants, enhanced oil recovery and training in the oil and natural gas sector [38, 39]. The “Druzhba–Dosti” joint statement, signed by both the countries in this Summit, clearly revealed how hydrocarbon has turned into a strategic resource and an area of negotiation and cooperation. In a Joint Communiqué of the three Foreign Ministers’ Meeting of India, Russia and China at Beijing in February 2015, Moscow explored the potential for cooperation in the field of oil and natural gas and other forms of energy among these three countries. Nirmala Sitharaman, India’s former Minister of Commerce and Industry, at the nineteenth St. Petersburg Economic Forum in June 2015, reiterated extensive investment between the two countries in the energy sector [40]. Moreover, Narendra Modi, in his visit to Moscow for the sixteenth India–Russia Annual Summit in December 2015, signed agreements for bilateral engagements in geological surveys, exploration and production of hydrocarbon (onshore and continental shelf) resources in the Russian territories [41]. In the most recent times, inviting Indian Prime Minister Narendra Modi as Chief Guest to the Fifth Eastern Economic Forum (1919), which is meant for the development of oil rich Eastern Russia, at Vladivostok in 2019, is an indication that Russia wants India’s extensive involvement in the overall development of the region. This extended hand of Russia could be largely attributed to, India’s passive support to Russia on Crimea issue and Moscow’s support to New Delhi on the repealing of Article 370 of the Indian Constitution that provided special status to Jammu and Kashmir and Putin’s strong criticisms to “false and misleading” propaganda of Pakistan [42]. Both Russia and India are trying to redefine their historical economic ties that have been predominated by military and civil nuclear cooperation. Efforts have been put to grow bilateral trade volume from the existing $11 billion to a target of $30 billion by 2025. Within this fulcrum, the signing of the roadmap for collaboration and cooperation in the hydrocarbons sector for 2019–24 has led a “new pillar of cooperation”, as said by Indian Foreign Secretary Vijay Gokhale. The geological exploration and joint development of oil and natural gas fields reiterate

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sincerity of both the countries to carry forward the existing gains of cooperation in the hydrocarbon sector. The energy pacts with Russia are “major breakthroughs”, and “attractive”11 for India to purchase such resources from Russia. The “Make in India” program of India, emergence of Northern Sea route, the proposed India–Russia Intergovernmental Agreement on Promotion and Mutual Protection of Investments, and Trading Agreement between the Eurasian Economic Union (EAEU) and India are some of the emerging opportunities to facilitate energy trade between the two countries faster.

8.4 Crimean Crisis—Balancing the Global Powers The skirmish between Ukraine and Russia over the Crimea has developed at a time when India is focusing on Russia’s offshore and onshore zones in its quest for a longterm strategy towards energy security. While rejecting Russian invasion of Ukraine (or annexation of the Crimea), New Delhi has maintained a delicate balance by declaring that “Russia had legitimate interests” in Crimea [43] and has shown disappointment about Western sanctions on Russia. India is non-critical on Moscow’s foreign policy, but, at the same time, it has not recognized Crimea as an effective part of Russia. Historically, New Delhi has been reluctant to criticize Moscow in international platforms that is going back to Soviet intervention in Afghanistan in 1979 when India refused to criticize. On Crimea issue, New Delhi even went beyond the stand of Beijing. In the United Nations when both the countries abstained on the UN resolution on Russia, India went ahead to China with a Note that Russia has a legitimate claim in Crimea. Although China supported Russia on international issues like Libya and Syria, yet showed some shorts of reactions on Crimea, which was not well acceptable to Russian diplomats. The Chinese President Xi Jinping was quoted by the official Chinese media, where he had said, “At present scenario, the situation in Ukraine is highly sensitive and complicated, which has regional and global implications”. Beijing believes that Moscow can coordinate with other parties involved to push for a political settlement of the issue, which will ensure regional and global peace and stability. China supports the proposals and mediation of international community that could lead to reduction of tension. All these acts of China, are somehow contrary to India’s well balanced approach that attracted the Russians most. When questioned on Crimea versus Moscow, Shiv Shankar Menon, the then National Security Advisor of India, said, “We hope the issues are discussed and resolved through a constructive dialogues [44].” Apart from the Russian claims, India has its national interest to safeguard its overseas Indians in Ukraine where 5000 Indians lives, of which students alone constitute 4000.12 India’s stand on Crimea is largely an indicative of its intention of maintaining a strategic and well-balanced approach towards both Washington and Moscow. In the wake of Crimea crisis, there are the arguments that the USA can push India for an import curb on Russian oil and natural gas and petroleum products, as it did in the case of Iran on nuclear issue. However, it could not work well since, unlike Iran, United Nations had no sanctions

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on Russian energy assets; and New Delhi does not want a unilateral sanction so as to harm its relations with an emerging powerful nation. This approach is largely in congruence to New Delhi’s geostrategic partnership with Moscow and present equations in global politics. India’s abstention at the UN voting against Russia, its reiteration of the “sovereignty and territorial integrity of all states and opposition to unilateral sanctions, are indicative of putting Russia and the USA or the West on an equal footing in its strategic calculations [45]. Most significantly, India went ahead with the fifteenth Indo–Russian Bilateral Summit in New Delhi in December 2014 despite Washington’s protestation that it was not a goodtime “to make business with Russia as usual” [46]. Yet, India’s approach towards Russia vis-à-vis the USA could not be construed in terms of a zero-sum-game because of some pressing factors. First, when New Delhi signed the Indo–USA civilian nuclear energy deal, Moscow appreciated the move. Second, India’s TAPI energy pipeline has been revived through the US backing. Third, the USA is persistently pressing Dhaka for the implementation of the Myanmar–Bangladesh–India (MBI) gas pipeline project and the supply of surplus natural gas from Bangladesh to India. Fourth, the 2014 visit of the Crimean leader, Sergei Aksyonov, with Vladimir Putin, to India and his unofficial talks with the Indian businessmen, irked Washington.13 But, this could not deter former President Barack Obama in attending Republic Day celebration of India in 2015, as its Chief Guest. This might be in congruence to what the Indian Prime Minister Narendra Modi said in December 2014, “The dynamics of global geopolitics and international relations is fast changing” [48].

8.5 Clout in Crude Price and Economic Sanctions The crude price in the international energy market has been in a declining trend since 1914, and it reached to its lowest level on 13 January 2015 when Brent crude oil price reached to six-year low of $45 per barrel.14 This decrease, however, was largely an outcome of various factors working together and influencing each other in the international energy market. First, the rapid increase of shale energy exploration by the USA and its net export of natural gas.15 Second, boom in Russian energy exploration, production and international supply. Third, the slow down of the Chinese and European economies which have contributed for a situation of oversupply in the global energy consumption [49]. Fourth, the quick and unexpected recovery of the oil and natural gas fields which were closed during the Arab Spring, as seen in Libya; and exploration of more oil wells in Iraq, in spite of civil war, and the insurgency caused by Islamic State (IS). Fifth, the quantum of oil production increased significantly by the Organization of Petroleum Exporting Countries (OPEC) cartel that reached to its highest level than the previous two years. In May 2014, the production level of OPEC increased to 31.22 mbd, a 4% increase over its previous target [50]. Sixth, a lack of unanimity within OPEC that can be well explained through “price war”. While Venezuela and Iran advocated for production cuts, Saudi Arabia16 stood with its “price war” strategy, so as to protect the OPEC market and restrict the USA and Russia

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expanding their global energy market. Seventh, the USA expected that a low oil price would undermine Moscow’s ambitions in Europe, Russia’s influence in the global energy market, and thus, a spur in the global economy would lead to demand for US shale. Crucial to mention, each $10-per-barrel drop in the crude oil price was a boost to America’s GDP by 0.1%, according to the statistics of Swiss Investment Bank, UBS [51]. On the other hand, Russia had showed its reluctance not cut production to shore up crude prices, “If Russia cut the production, the exporting countries will increase their production which means a loss of country’s niche market,” said Russia’s Energy Minister Alexander Novak [52]. Along with the declining crude price, Russia has been hurt by the Western sanctions-led by the USA and the resulted economic problem and decline of rouble value in the international financial transactions.17 The rouble has lost roughly 25% of its value vis-à-vis the dollar, the yen, the euro, and it loses about $2 billion revenue for every dollar fall in the crude price [54]. The USA and some of its allies have imposed sanctions on big corporate houses in Russia. Both the World Bank and International Monetary Fund (IMF) warned that Russia’s economy would adversely get affected by the decline in the crude price and sanctions [55]. This negative development compelled Rosneft to ask for financial assistance of $44 billion from the country’s National Wealth Fund [56]. Likewise, one of the key reasons for which Russia abandoned the South Stream project could be attributed to financial crunch faced by the oil and natural gas sector in the country. Western companies like Total that had agreed to explore and produce shale energy in partnership with LUKoil, have halted the production due to the sanctions. Hence, without the financial and technological support of energy giants like Eni, Exxon, Mobil, Statoil,18 British Petroleum and Shell, it is difficult for Russian firms to finance new projects, especially highcost projects of Arctic offshore, deepwater, and shale research and exploration [57]. However, the decline of crude price and Western sanctions have not restricted Russian energy export. Russia, since then, has been resorting to various measures and strategies to recover from its economic challenges. There are some, but crucial factors, that have helped Russia to tide over the economic difficulties to a large extent. First, the country has foreign exchange reserves of about $450 billion, as estimated in 2014 [58, p. 55], which could last for many years, by which time the price of crude predicted to recover gradually. Therefore, the country is not in as much trouble as the economically weaker energy-exporting countries like Iran and Venezuela today. Second, the fall in the price of crude is expected to be temporary, as it is seen in past. Third, the falling of rouble made some important export industries, such as farming, more competitive. Fourth, the exports, combined with import-blocking counter-sanctions, by Moscow implies that Russia still has a trade surplus in the international market [59]. Fifth, the increase of interest rates of Russian Central Bank has resulted in a rise of oil and natural gas share markets in the country. From an Indian perspective, the low crude price and Western sanctions against Russia have implications for the Indian oil and natural gas companies, whereby many new projects in Russia have turned nonprofitable, particularly the high-cost projects of Arctic, drilling in deepwater, the Yamal Peninsula and Sakhalin. The ONGC, OIL, Reliance Industries and Bharat Petroleum Corporation Ltd, are seeing

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the value of energy assets bought overseas before 2014, are eroding. Reliance Energy estimated revenues of about $4.5 billion from its 45% stake in a shale gas project with Pioneer Natural Resources of the US. But, this is not yet materialized in a full scale because of declining price of shale energy. Likewise, India has shown less interest in Russian shale resources. For ONGC, the returns from its newly owned $2.1 billion acquisition of Imperial Energy’s19 oil reserves in Tomsk proved below the forecast made prior to the purchase of company. Moreover, the declining crude price has further disappointed the Indian energy policymakers on this acquisition. Alongside the crude price decline, sanctions have affected business of both the countries. The Indian interest to drill shale reserves in Siberia could be delayed since the Russian companies have agreed to US energy firm Liberty Resources to drill four wells in the Bazhenov shale formation in Siberia.20 The GAIL had negotiations for the import of more natural gas from Gazprom but suddenly signed several agreements with the American corporations, such as WGL, for the import of 2.5 million tonnes of natural gas from the USA for a period of 20 years [46]. However, OPEC’s decision to cut its oil production by 1.2 mbd21 starting from January 2019, among other factors, helped in recent rise of the crude price, with Brent crude rising from $46 to $58.94 in August 201922 and $64.27 in December 2019.23 The leading non-OPEC producer, Russia, along with OPEC countries, had also announced that it would cut production by as much as 300,000 bpd from January 2019,24 said Energy Minister Alexander Novak [62]. The rising crude price is expected to help the Russian and Indian energy companies recover to the level and make their ventures profitable once more. Financially, increasing crude prices would help reduce Moscow’s economic hardships, budget deficit, its import substitution programmes and overall growth of the energy sector in the country. Accordingly, the IMF revised its forecasts that the Russian economy would grow in 2017 by one percent instead of 0.8% as projected initially [63]. As for India, the rise in crude oil prices makes takeover of oil blocks by the Indian oil and natural gas companies viable and lucrative since most of the foreign acquisitions by Indian companies are done through loans taken abroad, and valuation of the oil assets in the international energy market is calculated on the basis of net present value and possible reserves. Moreover, oil blocks abroad, which are seeking large investments to keep the existing oil wells flowing, will not get affected more because of cash flows in the global energy market [64]. Hence, the Russian and Indian companies are getting recovered, and their joint investment and cooperation in the hydrocarbon sector, at the national and global level, will take the momentum further. However, the price should be profitable— both for the suppliers and the buyers that is a natural economic balance. According to Dharmendra Pradhan, the oil prices should not be too low since the producers need renewed investment to continue exploration of oil fields, develop energy infrastructure and pay loans and interest. The oil industry itself is a capital-intensive industry where at least a reasonable price is imminent requirement. On the other side, if the prices bite, this will cause problems for the oil-consuming nations. So, the current market prices provide an opportunity for the oil exporting economies to develop, whereas prices above $50 bbl (barrel) create an unnecessary burden on a developing nation like India. For India, price increase for every $10 bbl leads to budget losses

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of $15 billion [23], and the possible further extension of oil production cut in 2020 will definitely effect India’s economic growth and development prospects.

8.6 India–Russia–China–US Matrix Since the international energy market is highly volatile today with price fluctuations and new market options have evolved in the form of Russia’s mammoth natural gas and America’s shale, India is eagerly looking to harness the emerging options that are knocking India’s doorstep. It is time for New Delhi to assess the opportunities available in the US shale energy market. Geopolitically, the shale energy revolution provides a new avenue of energy resilience for the USA, enhancing its footprint in the world while posing as a challenge to Moscow’s expanding energy footprints. Apart from prospect of shale energy import, India is hoping to harness its own shale gas reserves25 by inviting investments from both government and private sectors of the USA. With the cabinet approval of the Shale Gas Policy (2013) in India, there is a high expectation of a concrete, focussed and time-bound development of shale resources in India, in collaboration with the American shale industry. However, there are some issues and limitations to Indo–US energy collaboration. First, America has increased shale gas exports to Ukraine since the latter’s overdependency on Russia went contrary to its national interests. Second, the US is pumping energy to the European markets to reduce the Europe’s dependency on Russian hydrocarbon resources. Hence, the scope for India availing American shale energy resources seems to have a lesser possibility, at least for now. Third, India has to pay a high premium to the US because the shale energy price has not come to a level that could be competitive to the traditional oil and natural gas resources, and there are a large number of buyers looking to the USA so as to experiment with the new energy.26 Whatever the limitations, both US and India have started working on shale energy,27 and India, in future, can use US shale as a potential bargaining chip to trade with Russian energy assets, diversification of energy destinations and enrichment of its import basket. On the other hand, Russian natural gas is relatively cheap, as evident in the context of China–Russia gas pipeline contract, less competitive than the Qatar’s, more secured and reliable than the Iran’s and much resources to pump more countries. Significantly, two major energy consuming countries in the world—China and India, are in a race for Russian oil and natural gas assets although the former’s trade and investment in the Russian hydrocarbon are huge.28 Unlike other parts of the world, such as in Ecuador, Angola, Venezuela and Kazakhstan, where India has lost lucrative deals to China, examples of sharp competition between the two countries are much prominent today. But, China has the “first mover” advantage and a record of early execution, which can be seen in Myanmar–China gas pipeline that caused the Myanmar–Bangladesh–India pipeline (MBI) project on hold, where Beijing took the leverage over New Delhi. Moreover, the Indian policymakers admit that India does not have the resources to compete barrel-for-barrel with China in the international

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energy market, where Russian energy definitely included. The former Minister of Petroleum and Natural Gas of India, Mani Shankar Aiyar, aptly tried for collaborative approach between New Delhi and Beijing, “When we go for a morbid competition to acquire oil and natural gas assets in third countries, we only end up with the driving costs for each other, and ended up paying billions of dollars in our fierce exertion to outbid each other” [68]. Hence, New Delhi is looking for a collaborative approach with Beijing so as to avoid needless price hikes [69]. However, Beijing’s response to Aiyar’s appeal seems supportive but noncommittal. Yet, there are some instances where both India and China have showed their common interest to work. For example, both the countries are engaged with Russia in bidding for the hydrocarbon resources in the Far North [40]. Nevertheless, China’s trade and investment plans in Russia’s energy sector are definitely a concern for Moscow. The Chinese economic slowdown and its declining stock market, recent project delays, suspension of the Power of Siberia-2 pipeline project and latent competition and rivalry in Central Asia makes a sense of Russia’s cautious move towards Chinese footprints in the Russian and Central Asian geopolitics.29 Contrary to Chinese economy, as forecast by the IMF, India, with its huge potential energy requirement for economic growth, is set to grow faster than China, and Russia sees India as one of the highly potential markets and viable partners to withstand Western sanctions and thus diversify its export basket. The “Enhanced Co-operation in Oil and Natural Gas Sphere” between India and Russia, as stated by Vladimir Putin, is clearly an indicative of India’s bourgeoning significance in the Russian resource market, and Russia clearly wants to get into the Indian market at earliest, with a large presence. If a triangular relationship is taken into account, Moscow is focusing on Asia to diversify its supply market, and New Delhi is looking for opportunities so as to prevent Russia from leaning so much on China [70]. Hence, New Delhi is pushing Moscow to play a larger role in the Asian resource market and strategic landscape since a stable balance of power in Asia cannot evolve without both the countries working together to manage China’s rise [71]. Russia is also much concerned about rising China, and consequently, Moscow’s relative power position vis-à-vis China and India in the Asian interstate hierarchy and power calculus, besides the blooming relationship between New Delhi and Washington. Hence, Moscow sees New Delhi as a potential Asian power to engage with so that New Delhi would not fall to Washington’s influence. China, on the other hand, is also wary of its overdependence on the Russian energy assets [72]. Therefore, China is now exploring and exploiting its shale energy resources and connecting pipelines with the Central Asian countries by avoiding and bypassing the Russian territory, with the intention that Beijing would not fall to the possible geopolitical traps of Moscow in future. An Assessment India, in its approach for diversification, finds Russia as its age-old partner to rely and reinvigorate energy trade and investment under the prevailing geopolitical dynamics. For India, Rosneft is a very reliable partner, Gazprom—a pleasure for India to work and Russia—a potential energy power to do trade and invest. New Delhi’s balancing

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approach in the context of the Ukrainian crisis; the ramifications of western sanctions against Russia; America’s shale resources; India–China calculus in the Russian sphere of energy market are the factors that bind India–Russia hydrocarbon trade and investment in recent periods. India’s energy requirements and greater geopolitical clouts have resulted in importing of more hydrocarbon resources from Russia. However, the ongoing tensions between Russia and the West, fluctuating crude oil prices and the falling value of the rouble will definitely affect India–Russian cooperation in the energy sector. Prime Minister Narendra Modi’s frequent meetings with his Russian counterparts, agreement for further investment in the energy sector, launching of ‘Act Far East’ policy, announcement of one billion US dollar line of credit [73] for the development of the resource-rich eastern Russia and being adorned as the Chief Guest at the Fifth Eastern Economic Forum are all indicatives of India’s engagement with Russia’s Far East region. Further, as a strategic move, India’s presence and involvement in this sparsely populated region of Russia is an indicative of New Delhi’s strategy for balancing Beijing’s growing presence in Russia that can be interpreted under India’s broad grandiose of Indo-Pacific geopolitics. Although a sense of competition prevails between India and China in the Russian energy market, yet both the countries working with Russia in the multilateral platforms such as BRICS, Asia–Pacific Energy Forum and Russia–India–China trilateral meetings, where the concerned countries have persistently stressed for a re-setting of international relations-based on a win-win situations and geopolitical dynamics. Moreover, in the matrix of India–Russia–US energy market, Indian companies have entered into short-term contracts for the import of American oil and natural gas, including shale energy, and promotion of cooperation in the areas of research, exploration and exploitation of extractive energy resources. End Notes 1. 2. 3. 4. 5. 6. 7.

8. 9.

BP Statistical Review of World Energy, 68th edition, 2019, p. 14. BP Statistical Review of World Energy, 68th edition, 2019, p. 16. BP Statistical Review of World Energy, 68th edition, 2019, pp. 30–33. Statement of Andrew Weiss, Researcher at Carnegie Endowment for International Peace, a think tank, based in Washington; Quoted in Shuster [12]. However, while targeting the Asian market, Russia has not given up its existing export and potential energy market in the West. The statement of Dharmendra Pradhan, in CNBC [26]. The Sakhalin–1, Offshore project is located in the Far Eastern offshore oil and gas fields of Russia, and it is India’s first consortium investment in oil and gas outside India’s borders. In this project, OVL has 20%, Exxon Mobil—30% (Operator) Sodeco—30%, SMNG—11.5%, and RN Astra—8.5%, stakes, in Ministry of Petroleum and Natural Gas. Government of India [25, p. 78]. OVL, 2017. ‘Assets/CIS and Far East/Russia: Sakhalin–1,’ ONGC Videsh Limited, http://www.ongcvidesh.com/assets/cis-far-east/. The Taas-Yuryakhhas been operational since 5th October 2016 and it is producing energy with a current production level of 2.502 MMTPA and

8.6 India–Russia–China–US Matrix

10.

11. 12. 13. 14. 15.

16. 17. 18. 19. 20.

21.

22. 23. 24.

25.

26.

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projected peak production of 5 MMTPA by 2021, in Ministry of Petroleum and Natural Gas. Government of India [25, p. 142]. Litasco is an exclusive international marketing and trading company of LUKOIL, which has affiliates in Germany, Singapore, Kazakhstan, the United States, the United Arab Emirates, and the Netherlands and representative offices in Russia, India and China. Statement of Indian Foreign Secretary Vijay Gokhale, in Livemint [42]. Of the total 5000 Indian population, students constitute 4000, in The Times of India [44]. The US administration was quick to issue an official statement directed at India that it was not time “for business as usual with Russia”, in Upadhyay [47]. The crude price decline was sharp, compared to its six-year-old high in March 2009, when Brent crude was priced at $115 per barrel. There has been a drastic increase in oil production in the US, from 6900 barrels a day (tbd) in 2005 to 12,704 tbd in 2015, and natural gas production has increased from 511.1 to 767.3 bcm in 2015, in BP Statistical Review of World Energy, 2016, pp. 10 and 22. Saudi Arabia remained the biggest contributor, pumping close to 10.3 mbd in May 2015, in Kelly [50]. For Russia, oil and gas account for two-thirds of its export basket, in Pradhan [53]. OVL has a joint partnership with ExxonMobil, ENI and Statoil in Russia. It is completely owned by OVL. On 12 September 2014, the US banned its companies from supporting exploration and productive activities in deepwater, Arctic offshore, and shale projects in Russia. The 15-member OPEC cartel had agreed to reduce its output by 800,000 bpd, while Russia and the allied producers will reduce a 400,000 bpd, in DiChristopher and Meredith [60]. Oil (Brent), Markets Insider, https://markets.businessinsider.com/commodities/ oil-price. Oil (Brent), Markets Insider, https://markets.businessinsider.com/commodities/ oil-price. The 11 non-OPEC countries, on the sidelines of the Vienna Conference of OPEC, 2016, agreed to cut oil production by 558,000 barrels per day, in Metzler and Jenne [61]. Various researches reveal that India has six main reserves of shale energy resources which could be successfully explored: Cambay (Gujarat), Assam– Arakan (North East), Gondwana (Central India), Krishna–Godavari onshore (KG–East coast), Cauvery onshore and the Indo-Gangetic basin. Apart from this, there are also isolated deposits and unexplored areas of shale energy. It is significant to note that even though US shale oil and gas have far higher prices than conventional natural gas, many countries have been forced by the USA to import US shale to pay off their debts and other costs.

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27. The OIL has hired Schlumberger Asia to assist in feasibility studies and exploration in the Assam–Arakan and Rajasthan basins; ONGC, in contract with Schlumberger, has got involved in shale gas activities in the Damodar Valley; ONGC and ConocoPhillips have undertaken joint studies on shale gas; GAIL has acquired a 20% stake in Carrizo Oil and Gas Inc’s Eagle Ford Shale for $95 m and signed agreements with Cheniere Energy for the supply of 3.5 million tonnes per year for LNG supply; and Reliance has acquired a 45% stake in Pioneer Natural Resources’ Eagle Ford Shale assets for $1.3 billion and signed three upstream joint ventures for carrying out operations in America, in Nakano et al. [65], Pradhan [66]. 28. Russia is the second-largest supplier of oil to the Chinese market, after Saudi Arabia. Russia is predicted to export 35% of its total crude oil and 25% of its total gas supply to China by 2025, in Agnihotri [67]. 29. Back in 2007, President Putin predicted that Russia would be exporting 35% of its total crude oil and 25% of its total gas supply to China by 2025. However, Russia’s oil and gas exports to China dipped by 20% in 2015.

References 1. Reuters. 1991. End of the Soviet Union; Text of the Gorbachev’s Farewell Address. The New York Times, December 26, 12. 2. Yergin, Daniel. 2012. The Quest: Energy, Security, and the Making of the Modern World. London: Penguin Books. 3. Gustafson, Thane. 1999. Capitalism: The Russian Cycle, 1. Cambridge: Cambridge University Press. 4. Robertson, Helen. 2013. Russia Wouldn’t Develop Shale Gas for a Decade. Petroleum Economist, April 19. https://www.petroleum-economist.com/articles/politics-economics/asiapacific/2013/russia-wont-develop-shale-gas-for-a-decade. 5. Baker, Peter, and Susan Glasser. 2007. Kremlin Rising: Vladimir Putin’s Russia and the End of the Revolution. Potomac Books. 6. Stent, Angel. 2008. An Energy Super Power. In The Politics of Global Energy, ed. Kurt Campbell, and Jonathan Price, 78 and 95. Washington, DC: Aspen Institute. 7. Katusa, Marin. 2015. The Colder War: How the Global Energy Trade Slipped from America’s Grasp. Hoboken: Wiley. 8. Grigas, Agnia. 2017. The New Geopolitics of Natural Gas. Cambridge: Harvard University Press. 9. McAllister, J.F.O. 2007. Russia’s New World Order. Time 168(2). 10. Pradhan, S.K. 2011. Russia-US Relationship in the Post-Cold War Era: Can It Be Reset. Journal of Peace Studies 18(3 and 4). 11. Chomsky, Noam. 2008. Ossetia-Goergia-Russia-U.S.A: Towards a Second Cold War? http:// www/uni-kassel.de/fb5/frieden/regionen/kaukasus/chomsky.html. 12. Shuster, Simon. 2019. Putin’s Empire of Autocrats. TIME, April 15, pp. 24–25. 13. Perovic, Jeronim. 2009. Russian Energy Power, Domestic and International Dimensions. In Russian Energy Power and Energy Relations: Implications for Conflict and Cooperation, ed. J. Perovic, Robert W. Orttung, and Andreas Wenger, 6. New York: Routledge. 14. Handerson, James, and Simon Pirani. 2014. The Changing Balance of the Russian Gas Matrix and the Role of the Russian State. In Russian Gas Matrix: How Markets are Driving Change, ed. James Handerson, and Simon Pirani, 388–398. Oxford: Oxford Institute for Energy Studies.

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36. Katz, Alexandra. 2015. Putin–Modi Talks a Success, But No Triumph. Russia & India Report, December 25. 37. Sorokina, Olga. 2015. Russia, India, China to Cooperate in Defence, Global Security, Arctic Exploration. CRIENGLISH.com, December 28. http://english.cri.cn/12954/2015/12/28/2821s9 10393.htm. 38. Government of India. 2014. List of Documents Signed During the Official Visit of President of Russian Federation to India, December 11. www.pmindia.gov.in/wp-content/uploads/2014/ …/Russian_president-Visit.pdf. 39. Sputnik. 2014. Russian, Indian Oil Companies Agree to Cooperate on Hydrocarbon Exploration, December 11. http://sputniknews.com/business/20141211/1015748971.html. 40. Taneja, Kabir. 2015. China and India Go Arctic: The Asian Giants Join Russia in Bidding for Energy in the Far North. Politico, August 14. http://www.politico.eu/article/china-and-indiago-arctic-sanctions-gas-oil-exploration-lng/Geopolitics. 41. Oneindia. 2015. India, Russia Sign 16 Agreements During Modi’s Visit, December 24. http:// www.oneindia.com/international/india-russia-sign-16-agreements-during-modis-visit-196 5908.html. 42. Livemint. Delhi, Moscow Sign Energy Deal, Set $30 bn Trade Target by 2025, September 5, 2019. https://www.livemint.com/news/india/delhi-moscow-sign-energy-deal-set-30-bn-tradetarget-by-2025-1567624094272.html. 43. Sharma, Rajeev. 2014. Russian Interests in Ukraine ‘Legitimate’—Shivshankar Menon. Russia & India Report, March 10. 44. The Times of India. 2014. Russian Interests in Crimea ‘Legitimate’, India, March 7. https://timesofindia.indiatimes.com/india/Russian-interests-in-Crimea-legitimate-India/art icleshow/31557852.cms. 45. Mazumdaru, Srinivas, and Domínguez, Gabriel. 2014. India’s Balancing Act in Crimea Crisis, Russia Times, April 1. http://www.dw.com/en/indiasbalancing-act-in-crimea-crisis/a17534847. 46. Zanitti, Francesco. 2015. Russia, China and India Energy Cooperation. EIRA, January 6. http:// eiranews.com/index.php/en/open-forum/339-russia-china-and-india-energy-cooperation. 47. Upadhyay, Archana. 2015. India and Russia in a Changing World. Economic & Political Weekly 50(33):25. 48. PMO. 2014. PM’s Media Statement During the Official Visit of the President of Russian Federation to India, December 11. http://pmindia.gov.in/en/news_updates/prime-ministers-media-sta tement-during-the-official-visit-of-thepresident-of-russian-federation-to-india/. 49. TNN. 2015. Oil Tumbles to $45 a Barrel, Bringing Cheer to Consumers for Now. Times of India, January 14. http://timesofindia.indiatimes.com/business/india-business/Oil-tumbles-to45-a-barrel-bringing-cheer-to-consumers-fornow/articleshow/45877756.cms. 50. Kelly, Christopher. 2015. OPEC Production Levels Hit Two Year High, June 2. http://www.ara bianoilandgas.com/article-14099-opec-production-levels-hit-two-year-high/. 51. Inman, Phillip. 2014. How Oil Price Fall Will Affect Crude Exporters—And the Rest of Us. Guardian, December 21. http://www.theguardian.com/business/2014/dec/21/oilprice-fall-eco nomics-russia-us-scotland-uk. 52. Pizzi, Michael. 2015. Who Wins, Who Loses As Oil Prices Plummet? Al Jazeera America, January 7. http://america.aljazeera.com/articles/2015/1/7/oil-price-winnerslosers.html. 53. Pradhan, S.K. 2018. Indo-Russian Energy Cooperation: Geopolitics in a Fluid Matrix. Economic & Political Weekly LIII(6): 58. 54. Intelivisto. 2015. The Great Oil Price Crash, February 19. http://www.intelivisto.com/blog/tag/ commodity/#sthash.X4eiuNBg.dpuf. 55. BBC. 2014. Russia Makes Drastic Rate Rise to 17 Percent to Stem Rouble Decline, December 16. http://www.bbc.com/news/business-30490082. 56. Stratfor. 2014. Oil Prices Continue to Define Geopolitics, Geopolitical Diary, October 15. https://worldview.stratfor.com/article/oil-pricescontinue-define-geopolitics. 57. EIA. 2015. Russia is World’s Largest Producer of Crude Oil and Lease Condensate, August 6. http://www.eia.gov/todayinenergy/detail.cfm?id=22392.

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Chapter 9

The USA: Destination for a New Energy

The chapter attempts to analyse the new and unconventional shale energy potentials in both US and Indian energy market. The US strategy and policy framework, nature and extent of bilateral energy trade, US-OPEC-West Asia energy matrix, shale as a game-changer and debate of shale energy exploration versus environment are important areas of discussion in the chapter. This chapter starts with a historical interpretation, starting from the 1950s when the Mosaddegh government of Iran was overthrown. Since then, the USA, the largest consumer of energy, has been facing many challenges in one form or other due to global geopolitical dynamics and security challenges. However, the persistent research and development on shale energy sector by the US scientists and engineers successfully transmitted the USA from importer of energy to the net exporter of energy. The USA has highest reserves of shale in the world which is expected to play as a game-changer in global geopolitics, and thus a shift in the US foreign policy. As India has explored, discovered and undiscovered shale reserves, the US collaboration is foremost important for mutual benefits. Hence, this chapter attempts to explore India–US cooperation in the energy sector and implications for bilateral relations and global interests. Along with the US energy independence, the shale energy will definitely have implications on West Asian geopolitical dynamics, decreasing dependency of USA on the West Asian energy market, more independent foreign policy of USA and reduced role of OPEC in the international energy market due to more supply of energy. Further, the chapter puts an effort to critically assess shale energy trade and investment between the two countries, does the shale exploration cause environmental concerns, and the price effectiveness of shale energy for the suppliers as well as the buyers.

9.1 The Shale Boom It is only in the past few years the shale, as a significant source of energy, has caught the attention of the international energy market. The shale energy has gained © Springer Nature Singapore Pte Ltd. 2020 S. K. Pradhan, India’s Quest for Energy Through Oil and Natural Gas, https://doi.org/10.1007/978-981-15-5220-5_9

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widespread popularity in recent years, following the technological advances which have made full efforts in making this new energy commercially viable. However, there are imminent question that crop up on shale and shale energy market. What is shale? What progress the USA has made in this sector? How India will get benefited of the US shale revolution? And how the shale energy will affect global geopolitics. The shale is a fine-grained sedimentary rock containing an organic material called kerogen, which, when distilled, can produce oil and gas [1]. Shale oil or shale gas (also called “light tight oil”, LTO) is extracted by a process of drilling and injecting fluid into the ground at a high pressure. This act fractures the shale rocks and thus releases the natural gas inside. This fracturing process is called fracking or hydrofracturing, since water is the major ingredient in the fracking process. The cracking of shale deposits is conducted underground with a combination of highly pressurized freshwater and chemicals. The injected material includes a combination of fluids, chemicals, sand and lubricants like guar beans, which make the stone surrounding the rock formation to become permeable. This causes the fossil fuel to flow into the production well. This type of drilling has been used for 70 years now, although it is commercially viable today [2]. Shale oil gives the best yield for the most of the lucrative middle distillates. In other words, the gross refining margins (GRMs) of refineries will improve, if the shale oil is used.1 For the shale oil wells, drillers go right to the enhanced oil recovery (EOR) stage. Shale oil is not produced from a reservoir, instead, out of the source rock which is many thousand feet below. The shale oil production rises and falls much faster than oil from the typical conventional oil wells and natural gas blocks. If the conventional oil production is like sticking a straw in the ground and letting natural pressure push oil out increasingly for a long period of time, the shale oil production is wringing a wet sponge, where there will be a lot of liquid right away, but it dries up very fast. Further, to keep the shale fields flowing, there is the need to wring the sponge continuously, drilling and fracking of wells. The shale wells differ from conventional wells since they have higher operating costs, which require more and sustained capital investment. In the process of fracking disposing of frack water is more of a manufacturing process than just drilling [3, p. 204]. Thus, operating costs are higher since shale production requires not only drilling but also fracking and most often refracking of the same wells, which requires sustained technical staff and infrastructure. And, to keep the production up in a field, more shale wells must be drilled and fracked consistently. It is apt to state that because of its relatively high operational cost, capital intensity, financing needs, steep decline rates and constant capital, shale energy is much more responsive or “elastic” to market prices. The large-scale shale reserves and assessed basins are found in the countries of USA, Canada, Mexico, Argentina, Paraguay, Bolivia, Brazil, China, South Africa, Morocco, Libya, Algeria, Tunisia, Australia, Norway, Sweden, UK, Netherland, Germany, Russia, France, Belgium and Pakistan. Countries with assessed basins include Colombia, Mexico, UK, Romania, Bulgaria, Maldova, Hungary, Slovakia, Croatia, Serbia, France, China, India, Pakistan, Australia and China.2 Significant to note, the shale boom has transformed the USA from the world’s largest energy importer into a net exporter of shale resources. The oil cartel Organisation of

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Petroleum Exporting Countries (OPEC) forecast early this year that new oil supplies from the US will exceed growth in demand in 2018 as the US industry thrives [4]. However, the recent shale boom of USA is largely due to some bitter experience that the USA faced in past. A plethora of international issues like oil embargo in 1973– 1974 and the Iranian Revolution in 1979 necessitated the USA to look for alternative sources of energy and diversification of America’s energy basket. The Gulf War I (1990–1991) and Gulf War II (2003) fuelled the dare necessities of America’s energy requirements and the quest for energy security. The fluctuating oil price and political instability, along with security aspects, since the 1970s, had been an adverse impact not only on the economies of USA but also its allies, who have been largely dependent on oil imports [5]. With the oil being traded only in dollars as per the 1945 agreement between the USA and Saudi Arabia, it was essential that Washington exercised control over this strategic resource. But, while doing so, it was vulnerable to the impact of oil-related politics and insecurities of the oil-producing countries and supply routes [6, p. 26]. Although the first recorded extractions of shale gas took place in 1825 in Fredonia, New York, the fracturing or “fracking” technology has matured recently to a level where the commercial-scale production has become viable. It was only after 1976 when the US government begun investing in gas research as part of the Eastern Gas Shales Project, and thus the potential of shale began to emerge. From 1980 to 2000, tax incentives were given to promote shale drilling and thus provided the stimulus required for technology innovations. The commercial shale gas production began in the Barnett shale in North-central Texas in 2000 [3, p. 202]. However, in 2006 the shale revolution formally launched in the Parshall field in Bakken–Three Forks, North Dakota, from where it was originally discovered in 1951.3 In 2007–2008, the US policymakers worried that the increasing American dependence on energy imports, and together with rising prices, could severely constrain and limit America’s global geopolitical clouts in a long term [7]. But the shale energy has turned as a “game-changer” for America’s quest for energy security. The shale resources have made the USA as its largest producer and self-sufficient, thus leaving the global oil market with a huge surplus. The shale will also enable the USA to become energy-independent by the year 2020, according to a report of the Forbes magazine. The EIA estimates, the USA holds 862 tcf of recoverable shale gas reserves today, and counts for 50% of all natural gas produced in the US in 2015, an increase from 1% in 2000, to 20% in 2010, 37% in 2012, and 48% in 2014 [8]. This implies how USA is uncomparable to other shale-rich countries in the world such as Canada which presently produces 15% and China 1%, and in a race with Russia and Iran for number one position in overall natural gas production. Further, the existing deposits by 2032 are expected to rise by 65% [9]. All these developments indicate how there is a shale boom in USA and how the shale gas energy production has swiftly and consistently increased. The important shale blocks and regions in USA include: Haynesville in eastern Texas, North Louisiana, North Dakota, the Woodford in Oklahoma, the Eagle Ford in Southern Texas, the Marcellus and Utica shales in Northern Appalachian. Other blocks and states include New Albany, Barnett and Haynesville, Ohio, New York and Pennsylvania.

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Barack Obama, the former President of the USA, in his State of the Union Address, exhorted the Americans with an ambitious and achievable target by 2035, where the USA would produce 80% of the electricity from a diverse set of energy resources— including efficient natural gas resources that include shale. “The Recent innovations have given the opportunity to tap larger reserves, and the shale is under our feet”, President Obama said in 2011 [9]. In his Blueprint for a Secure Energy Future, 2011, Barack Obama outlined the government’s priority for maintaining America’s leadership in research and development (R&D) which was meant for deploying innovative technologies that will create jobs and reliance on energy assets.4 His successor Donald Trump’s determination for “energy revolution” by reversing regulations on oil and gas drilling, including shale resources under his “America First” energy plan, has seen with the natural gas production rising to 73.7 bcf per day (2 bcm/d) in 2017, up by 1.3 bcf per day from the 2016 levels. In 2018, the forecast for the natural gas production was another 4.1 bcf per day (total 77.8 bcf per day), an increase of the 2017 level. In the context of export, the LNG supply of USA is expected to rise to 12 bcf per day (0.339802 bcm per day) from the existing level by the end of 2017, and if the cross-border pipeline trade with Canada and Mexico is materialized, it will become a net exporter of natural gas by a margin of 15 bcf per day (0.424753 bcm per day).5 There are reports that Cheniere’s Sabine Pass LNG terminal in Louisiana exported 11 cargos in December 2016 to China, Japan and South Korea, Asia’s largest gas-consuming markets [10], apart from its export to Europe, LACs, South America and West Asia. Likewise, the US domestic production of crude oil has increased from a low of 5 million barrels per day (mbd) in 2008 to 7.7 mbd in 2013, and reached to 9.4 mbd in 2015 and 9.9 mbd in 2018 that superseded America’s peak oil production of 9.6 mbd in 1970 [11]. By 2020, America is expected to add an equivalent of 20% of total LNG to the total LNG volumes worldwide [11]. Before the shale boom, the US net import of gas accounted just 16% of its total domestic consumption in 2005 and by 2015 this figure declined to 3%. More than 90% of the imported gas was supplied from its neighbouring countries such as Canada and Mexico. Likewise, the oil import has also declined from its peak of 60% in 2005, with net imports decreased to 40% of total consumption in 2012 and 24% in 2015, the lowest ever since 1970 [12]. The greatest strategic potential of American gas has international ramifications such as support its existing allies, win over new ones, contain foes and bring the rivals into the fold. Although the geopolitical developments are driven by the market forces, not mere policies and objectives of the country concerned, yet America will exert its foreign policy assertively than before.6 All these indicate that America’s journey, started with US President Richard Nixon in early 1970s, has reached to a level of energy independence and thus reduced its oil overdependency on international energy market.

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9.2 Geostrategic Shift and Energy Market The future gas and oil suppliers may not be the same as today. Shale gas will definitely modify the trade of natural resources in the way that the USA will become less dependent on foreign oil and natural gas resources until the country is expected to become a significant supplier of shale energy or conventional oil and natural gas. At that time, the USA should be able to provide a cheaper gas than the current exporters such as Russia and West Asia do. However, this situation will represent a threat for those countries which are gaining more of their revenues from oil and natural gas industry. The geopolitics developed out of shale revolution definitely has international implications in US foreign policy and diplomacy. It is apt to say what Robert D. Kaplan once said “Geopolitics is rarely a zero-sum game. But in the case of shale oil, it is” [13]. Donald Trump once said his administration would make the USA “energy dominant”, a consistent presidential theme of making the country energy-independent [14]. Energy Secretary Rick Perry explained this narrative: “An energy dominant America means self-reliant; it means a secure nation, free from the geopolitical turmoil of other nations which seek to use energy as an economic weapon, and blackmailing; and an energy dominant America will export to markets around the world, and thus we will be able to increase our global leadership and role” [14]. This statement makes it clear that buying of US oil and natural gas is the route to earn the goodwill of White House. The emergence of shale gas definitely magnifies the importance of geopolitics in global energy market. Countries that have considerable shale deposits will be better placed in the twenty-first century for stiff competition between the states, and the countries without such deposits expected to be worse off, thus marking of a new determinant in international power structure. For long, foreign affairs of the powerful energy-importing countries have been mainly based on moral impetus for humanitarian intervention, but today, impersonal forces like geography and resources have largely determined the future of the course of management of energy resource, where the major energy consuming countries may not show their interest in the domestic and regional politics of the oil-rich nations for energy security. America, regardless of many of political choices it makes, is poised to be an energy giant in the twenty-first century. In particular, the Gulf Coast, centred on Texas and Louisiana, has embarked upon a shale gas and tight oil boom. That development of shale energy will make the Caribbean Sea, Gulf of Mexico, Panama Canal and overall North Atlantic Ocean energy, focal points of the western hemisphere. In a bilateral perspective, cooperation between Texas of USA and adjacent Mexico will intensify, as Mexico increasingly turned itself as a market for shale gas, particularly with its own shale basins bordering to the USA. The shale boom, in part, has a troubling implication for the Russian oil and natural gas industry. Russia is currently the energy giant for Europe, supplying energy with a larger quantity, providing Moscow with a political leverage over Central and Eastern Europe. Russia for the moment may face relatively competition in Europe because of surge of US shale. But, the USA still has a few capabilities to export shale gas to Europe since it has to build new liquefaction facilities to materialize energy supply.

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It has to establish plants on the Gulf of Mexico that convert the gas into liquid which could be carried by ship across the Atlantic Ocean and where the regasification facilities would reconvert it back into gas. This can be streamlined with favourable legislation, capital investment and expertise by the USA. So, a situation has not fully developed where the USA could export liquefied shale gas in a large scale to the European market in near future and less possibility of reducing European dependency on the Russian hydrocarbon sector. The USA has already started supplying oil to Ukraine in a massive scale because of Moscow’s cut-off oil and natural gas to Kiev due to Russia–Ukraine skirmish on Crimea, and it is working with Warsaw for harnessing Poland’s huge shale potentials in Europe. But, if Europe adopts shale gas it will be difficult for both Russia and USA to find buyers for their gas. If Europe keeps forbidding shale gas extraction and imposes restrictions on US supply of shale on environment count, the traditional oil market of Europe will remain a major energy partner of Russia and the existing relations between Russia and Europe will be strengthened further. The shale energy has implications for the West Asian energy market and OPEC cartel. The USA wants market to sell its booming shale gas abroad and thus requires market for that. Likewise, Russia, a non-OPEC country, is desperately looking for international market to pump its energy resources and survive its crisis-ridden economy. This can be best explained through the existing low crude price and subsequent market competitions. In 2018, the crude price reached to its peak of $46 dollar. But the OPEC did not cut its production to bring the price back to the normal level, and the major energy player Saudi Arabia of OPEC declined to play the role of swinger or swing producer. This approach was contrast to the earlier approach of OPEC which was generally responding to US request to cut production of oil, so as to maintain balance in the international crude price. The main factor responsible for this change was largely due to the fear of OPEC that the non-OPEC countries like USA and Russia must not grasp their existing markets. China is the second-largest consumer and importer of energy in the world, and the Chinese energy requirement necessitates American shale, but the ongoing trade war between Washington and Beijing poses gloomy picture of possible cooperation between the two countries in near future. Till date, China relies more on Russia, and Central Asian oil and natural gas market to meet its energy requirements, although largely relies on West Asian imports. China itself owns a large quantum of shale gas reserve, and in the coming years, it could be tempted to exploit. Hence, it is expected that Beijing will be less dependent on foreign hydrocarbons in general and US shale in particular. However, in the research and exploration sector of shale Beijing is looking for US expertise and technology and waiting to a stage where the exploration will be cheaper, or at least equivalent to the existing conventional oil and natural gas energy resources. On the other way, although Japan’s energy demand is thaw because of its economic slug yet it is a strong ally of USA and fourth-largest consumer and importer of energy in the world which is expected to be an important buyer of US shale. Likewise, South Korea is expected to look for US energy, and thus energy trade in the pacific region will expand, largely due to USA and Russia. But, in the liberalized economy, USA may not be able to monopolise the

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shale energy market. Other potential shale powers like Canada, Argentina, Poland, China and Russia will definitely compete with the US shale. Of all these competitions and challenges, India will be beneficiary in the competitive energy market, and the country has good relations with all the shale-rich countries in the world, except China.

9.3 Trade and Investment According to the US Energy Information Administration data, 2011, India’s recoverable shale gas reserves are equal to 63 trillion cubic feet.7 The IEA projects that India’s shale gas production might be able to reach 35 bcm by 2035 if basic resources are made available [15]. The recent researches have identified 6 main reserves of India that could be successfully explored: Cambay (Gujarat), Assam– Arakan (North-east), Gondwana (Central India), Krishna–Godavari onshore (KG east coast), Cauvery onshore and Indo-Gangetic basins. Apart from this, there are also isolated deposits and unexplored areas. With a historic shale gas search, the Reliance Industries, in 2006, discovered 14 tcf in its D6 Block in the Krishna–Godavari Basin in shale formations. Likewise, the Essar Energy is preparing roadmap to take lead in the shale gas exploration business in the Gondwana region where already it has 5 coalbed methane blocks. The public sector company ONGC had first struck shale gas at Ichhapur in Burdwan, West Bengal, as a pilot project in 2010, and expected to explore 30 additional shale gas wells in India over the next two years, worth of Rs. 600cr. In the same year, the ONGC also begun its exploration of shale gas at Jambusar near Vadodara in Gujarat. As per the New Shale Gas Policy, 2013, the ONGC and Oil India Ltd. are required to explore shale gas and oil in their nomination blocks [16]. Along with shale, India is looking at developing its substantial CBM and gas hydrate potential. According to Directorate General of Hydrocarbon (DGH), the coalbed methane (CBM) resources in the country are to be to the tune of 92 tcf (2.6 tcm), while its gas hydrate resources are estimated at 1894 tcm in and around the western, eastern and Andaman offshore areas.8 The Petroleum and Natural Gas Ministry formulated the National Gas Hydrate Programme (NGHP) in 2000. India is cooperating with other countries, including the US Department of Energy and Japan, in exploration and development of resources, besides data collection, analysis and identification sites of gas hydrate for pilot production testing. While development of gas hydrates is still not commercially viable, the potential for CBM has been assured. Till date, 33 CBM blocks have been awarded with only one block being under commercial production. In order to give a fillip to the production of CBM, the government is planning to amend the CBM policy of 2009 to provide incentives for investment in this sector [17]. No commercial discovery of shale gas reserves has been made in India so far, as said by the Petroleum and Natural Gas Minister Dharmendra Pradhan to the Lok Sabha. The government in 2013 announced policy guidelines for exploration and exploitation of shale gas and oil. In pursuance of this policy, under the first phase of assessment, Oil and Natural Gas Corporation Ltd. drilled 22 assessment wells in

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18 blocks in four basins (Assam, Krishna–Godavari, Cauvery and Cambay basins) and Oil India Limited drilled three wells in three blocks in two basins (Assam and Rajasthan) [4]. According to ONGC’s annual report for 2016–17, the oil explorer had identified 50 blocks under the first phase of shale gas exploration, which it later mulled shelving due to “limited success” [4]. While the unconventional shale gas reserves will take time to develop and cannot be considered with a short-term investment, in the medium and the long term, their development will be a significant contributor for dwindling domestic supplies. With the cabinet approval of the Indian government’s shale gas policy in 2013, there is a high expectation for concrete, time-bound and focused orientations for the development of shale gas resources and their bidding process. India is hoping to unlock and harness its shale gas reserves, which are spread across, although difficult to reach the terrains. Crucially, the policymakers and leaders of India have taken note of what former Petroleum and Natural Gas Minister M. Veerappa Moily said, “shale gas exploration would be a major step for India in achieving ‘economic freedom’…It took six years for the US to become a net exporter from being a net importer of energy with the use of shale gas and oil. We want India to do the same” [16]. India’s cabinet in 2018 approved a policy to allow companies to explore and exploit unconventional oil and gas resources such as shale oil and gas and coalbed methane under the existing production sharing contracts, as it aims to reduce its dependency on energy imports. The uniform oil and gas exploration policy will encourage the current contractors in the licensed and leased areas to unlock the potential of unconventional hydrocarbons in the existing acreages. The policy is expected to bring in new investment in exploration and production (E&P) and raise the chances for new oil and gas discoveries that could potentially increase India’s domestic production. Unconventional oil and gas exploration under existing production sharing contracts (PSCs) “will provide a major boost towards ensuring energy security for India”, India’s Petroleum Minister Dharmendra Pradhan said on Twitter. The new policy is a complete shift from the “one hydrocarbon resource type” to “uniform licensing policy” for simultaneous exploration and exploitation of oil and gas resources under PSCs [18]. The policy envisages utilizing “E&P facilities to full potential by unlocking exploration and exploitation of unconventional hydrocarbon reserves like shale gas and CBM which could not be explored earlier due to policy restrictions. New discoveries will also boost domestic production”, the minister said [18]. Since both the countries have commonness in their energy interest to meet their economic and domestic requirements, the cooperation between India and USA is a paramount importance. With the launch of bilateral India–US energy dialogue in May 2005, energy has been a mainstay of India–US strategic partnership. Since May 2005, the USA and India have engaged in a high-level dialogue to promote increased trade and investment in the energy sector. The dialogue comprises five working groups: oil and gas, coal, power and energy efficiency, new technologies and renewable energy, and civil nuclear cooperation. Since its formation, a new working group on sustainability has been established [15]. Accordingly, the USA and India will pursue four primary pillars of cooperation: (1) oil and gas; (2) power and energy efficiency; (3) renewable energy and sustainable growth; and (4) coal.9

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In December 2008, an MoU was signed between the US Geological Survey (USGS) and Directorate General of Hydrocarbon (DGH) for resource exploration hazards and environmental issues associated with gas hydrates, field studies and research for gas hydrate. In December 2009, the Minerals Management Service of the Department of the Interior of the United States of America and DGH signed an MoU for leasing and tendering programmes, resource estimation, methane hydrate R&D activities and human resource development in these fields. In 2009, both the countries also launched the Partnership to Advance Clean Energy (PACE) to push low carbon growth in India, wherein US Department of Energy committed $25 million from 2011 to 2016 to support the US–India Joint Clean Energy Research and Development Center (JCERDC). This was strengthened further under Modi–Obama meetings. In November 2010, Department of State, USA, and the Ministry of Petroleum and Natural Gas, Government of India, signed a MoU on “Shale Gas Work Plan”, which included exchange of knowledge and expertise in the areas concerning shale gas resource characterization and assessment, assistance to DGH of India by the US Geological Survey to measure India’s shale gas resource potentials, train Indians in shale gas resource assessment and regulation that includes production potential, publish the results of the technical and feasibility studies and resource assessment, and establish a joint clean energy research and development centre in India, with each government contributing annual $5 million for 5 years. In addition, the USA has led interagency initiatives including briefings, round-table discussions and field visits in the USA for the Indian teams [19]. In 2016, India, along with Government of Japan and the United States Geological Survey (USGS), had discovered world’s largest and most concentrated discovery of gas hydrates in the Bay of Bengal. If tapped economically, it can be a game-changer to India’s energy quest. According to India’s Hydrocarbon Outlook of 2015–16, under the upstream exploration and production sector, the memorandum of understanding (MoU) has been signed by India and the USA. India’s Minister of Petroleum and Natural Gas Dharmendra Pradhan and US Secretary of Energy Rick Perry held a meeting on 17 April 2018, at New Delhi, under the US–India Strategic Partnership Forum (USISPF), which was announced earlier in a bilateral meeting, held in 26 June 2017, between President Donald J. Trump and Prime Minister Narendra Modi at Washington,10 for a comprehensive arrangement for energy security. The USISPF is definitely a core approach for an enhanced energy security in post-1991 bilateral relations between the two countries. The Indian press release noted the development of cooperation with a high esteem, “a new chapter in the history of Indo–US trade” that emerged from the “strategic partnership of global significance” [14]. In keeping with the shared objectives to provide a stronger business orientation to energy cooperation, both the countries have noted with appreciation the growing investment of Indian companies in the USA and the beginning of oil and gas exports from the USA to India.11 Further, the bilateral talks have been revolved around, how USA can cooperate with India towards meeting latter’s energy requirements. In this regard, inter alia, both the countries have explored investment opportunities in LNG and shale gas resources and development of strategic petroleum reserves.12 Both the countries have been agreed to engage human resource for research and exploration of offshore

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and onshore oil and natural gas reserves in India. Accordingly, the USA and India have announced US–India Natural Gas Task Force that will facilitate a team of USA and Indian experts with a mandate to propose, develop and recommend to Indian government for the development and exploration of natural gas resources. Through a broader perspective, the work of the Task Force is expected to advance the strategic and economic interests of both the countries.13 According to Rick Perry, the US Energy Secretary, “Promoting bilateral trade is an important part of our work, but our mission reaches far beyond this. It is about business and government coming together in new ways to create meaningful opportunities that have the power to change the lives of citizens”.14 Donald Trump’s “America First Energy Plan” allocated an investment of $500 trillion for research and development in the extractive resources sector, which is an indicative of further scope of cooperation between the two countries. India seeks exemption to LNG import from the USA, and till date, the US Department of Energy (DOE) has approved export of LNG from seven liquefaction terminals to countries with which the USA does not have a free trade agreement (FTA). In 2013, the US Department of Energy authorized Freeport LNG Expansion, LLC (Freeport), LP and FLNG Liquefaction, to export its natural gas to non-FTA countries, which includes India [1]. Two of these permits include off-take agreements of Cheniere Energy Inc’s Sabine Pass project in Louisiana (3.5 mmt)15 and Dominion Energy Cove Point project in Maryland (2.3 mmt) with the Gas Authority of India Limited (GAIL) per year [15]. This supply of 3.5 and 2.3 mmt LNG by Cheniere Energy and Dominion Energy is in congruence to and a part of $32 billion supply deal that the GAIL has signed with these two companies for 20 years.16 India’s first liquefied natural gas (LNG) cargo from America landed at the Dabhol regasification terminal in Maharashtra in 2018. Significant to add that the U.S. exported its liquefied natural gas (LNG) and oil only after a meeting between Narendra Modi and President Donald Trump signed an agreeement at the White House in 2017. Since the meeting and till February 2018, India also received 3 shipments of US crude oil, worth an estimated $100 million. Given the market size and opportunities that the USA possesses, India’s oil purchase from the USA will increase to $2 billion worth of crude and LNG from the USA every year.17 India has basically imported crude oil from Cheniere Energy and Dominion Energy and significant to note, the import of both oil and natural gas has been possible only with the USA lifting of its 40 years oil export ban in December 2015. This opening of energy market has thus opened up avenues for India to capitalize the opportunities in the US energy market.18 The Indian oil refineries are capable of handling of a complex mixture of crude including sour and heavy crude, which offers these refiners opportunities to be globally competitive, and scouting to optimize refinery productivity. The arrival of very large crude carrier (VLCC),19 docked at Paradip Port in Odisha, to unload its 1.6 million barrels (0.233 MT) of shale oil on October 2017 is an indicative of India’s foremost step in bring this new energy to India’s requirements. This is incongruence to what the Indian Oil Corporation Limited (IOCL) bought 950,000 barrels of light sweet Eagle Ford shale oil and 950,000 barrels of heavy sour Mars crude in August 2017.20 India’s energy trade with America is expected to see large-scale

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import of LNG and crude oil in the coming years, where the GAIL alone would be procuring around $2 billion worth of LNG per annum from USA from 2018 to 2019 [20]. The three Indian companies—the Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL)—have placed orders to the tune of 7.85 million barrels (1.15 million tonnes, MT) of crude oil. The imported US crude was to be processed in the refineries located at Paradip, Haldia, Baruni, Bongaigaon, Kochi and Vizag. Apart from IOCL, the BPCL and HPCL have made agreement to receive 2.9 million barrels (0.45 MT) and 1 million barrels (0.146 MT) of US crude for their Kochi and Vizag refineries, respectively. Bharat Petroleum Corp Ltd. (BPCL) has already bought two of the US cargoes, worth of 1 million barrels of US WTI Midland sweet—its first purchase of the sweet variety from the USA. The refineries in India are importing both sweet and sour US crudes for refining. Reliance Industries Ltd. (RIL), the world’s largest refinery, bought one million barrels (0.146 MT) of West Texas Intermediate Midland crude and Eagle Ford crude in November 2017.21 To facilitate the transport of shale energy, the Indian Shipping Ministry has given permission to import one cargo from USA on Delivered Ex Ship (DES) basis. DES means the seller makes arrangement and bears all costs and risks involved in bringing the goods to the named port of destination of the buyer. This is a very progressive step, if compared to the existing arrangements. As per the existing policy, when a domestic refiner tenders to buy a crude from foreign nation, the Indian shipping lines get the first right of refusal by virtue of they are being allowed to match any lowest bidder for transportation of crude oil. Only when they waive their right can the oil firms use a foreign line. However, for a larger trade, transporting US crude needs very large crude carriers (VLCCs) and can be done only by foreign shipping lines. And to do that, oil companies have to obtain permission of the shipping ministry.22 India is also in talks with Japan for hiring very large container carriers (VLCCs) to carry a large volume of gas [1]. However, the import of American crude will definitely fill the caverns or reserves that the Indian government has established. With oil price fluctuation and volatility of energy geopolitics, it is time now for New Delhi to begin fast-tracking process of filling its strategic reserves. The USA has years of managing strategic crude oil reserves, and its expertise and technology could prove vital to India’s exploration activities. More to mention, the USA is looking for collaboration with India on its crude oil reserve programme as a part of a strategic energy partnership which covers oil and natural gas, power, renewable energy and coal. Currently, state-run Abu Dhabi National Oil Company (ADNOC) is the only one to partner with India to shore up its crude reserves and participate in India’s strategic petroleum reserves programme [21]. Therefore USA support could contribute further for India’s quest for construction of strategic oil reserves. The recent moves of the Donald Trump government are very progressive for cooperation. But, his government’s energy policy is, somehow, different from his predecessors, particularly on environment and climate change rhetoric. Given Trump’s energy priority under “America First Energy Plan”, where Trump tilted more for hydrocarbons, supported by shale boom, it is still difficult to assume how USA will cooperate India in its effort for clean energy, while augmenting hydrocarbon

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resources. However, Trump–Modi meeting in 2017 proved milestone for bilateral energy cooperation, and USA has assured India to remove all barriers for India, ensure Indian investment there and promote US energy exports to India [22]. Nevertheless, India has established its energy footprint in USA and Washington expects India as a potential country to trade. In a more specific way, the bilateral cooperation between the two countries can be illustrated through various extents. First, the Indian companies have invested $ 5 billion in acquiring assets in the American shale oil and gas industry and will also be buying US shale gas to be delivered. Second, the Oil India Limited (OIL) has hired Schlumberger Asia, an American company, to assist in feasibility study and exploration in Assam–Arakan and Rajasthan basins. Third, like the OIL, the ONGC, in contract with Schlumberger, has got involved in shale gas activity at Damodar Valley and will drill additional wells as a part of sevenstage pilot project-spreading to West Bengal and Jharkhand. Fourth, the ONGC and the ConocoPhillips, in 2012, undertook joint studies on the shale gas opportunities in India and America, where initial plan is to invest and explore wells in Cambay, KG, Cauvery and Damodar Valley, with an investment of Rs. 200cr. Fifth, the GAIL (India) Ltd. has acquired a 20% stake in Carrizo Oil and Gas Inc.’s Eagle Ford Shale gas for $95 m in 2011 and signed agreements with Cheniere Energy for the supply of 3.5 million tonnes per year for LNG supply. Sixth, in 2010 Reliance acquired a 45% stake in Pioneer Natural Resources’ Eagle Ford Shale gas assets for $1.3b and signed 3 upstream joint ventures with Chevron, Pioneer Natural Resource and Carrizo Oil and Gas and a midstream project with JV (Pioneer) for carrying out operations in the USA. By 2013, the RIL invested a total of $4.09b and achieved production of 22.1 bcf in these projects [16]. Seventh, in 2012 the OIL and IOC bought a 30% stake in a project located in Colorado’s Niobrara shale oil and gas site [19].

9.4 Implications of Cooperation While the USA has reached at its shale boom, India has now looked for import of American shale and harnessing of its existing resources and investment in the American energy sector. There are specific reasons which bring these two countries closer for energy cooperation, and implications of their cooperation are far-reaching. First, it is one of the alternative destinations of India’s energy import and thus enrichment of India’s energy basket. Second, no doubt, the Reuters reports, India was set to emerge as a key market for the American crude exports in the coming years, as the refineries were ramping up “test” purchases of US grades to diversify energy imports [22]. Third, additional supply of American energy resources will ensure a better sense of energy security for India in the wake of geopolitical threats in the international relations, insecurity in the global energy market and price fluctuations in the OPEC cartel. According to Arvind Subramanian, Economic Advisor to the Government of India, rising oil price is a big risk to the Indian economy, since every $10 a barrel

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rise in crude prices slows economic growth by 0.2–0.3% and fuels wholesale price index (WPI) inflation by 1.7% [23]. Fourth, the US shale will help the energy-importing countries a source of affordable energy and less carbon-intensive fuel.23 Initially, the US shale was costly. But with the abundance of shale gas in the USA and development of technologies, there has been increase in production, and efforts are going on to make it cheap, cleaner, affordable and commercialized.24 The Modi government has already expressed India’s energy interest with America-based on “competitive price” and “quality” [22]. Fifth, since the USA is a non-OPEC country, like Russia, India will have more flexible terms and conditions. Sixth, since the USA has posed as a potential energy power, definitely, Washington will look for Indian market. But the Indian market is rich with Iranian and Russian oil assets. So, USA is pushing India against Iranian and Russian energy assets. By doing this, Washington will have four vital interests fulfilled: firstly, strategically isolating Iran and Russia; secondly, making these two countries economically marginalized; thirdly, generating a space, although not for time being, for US–India energy market—in terms of technology, trade and investment; and not allowing either Iran and Russia to have a strategic leverage. Seventh, the IOC Director (Finance) A. K. Sharma said, “Buying of US crude has become attractive for Indian refiners after the differential between Brent, the benchmark crude or marker crude that serves as a reference price for buyers in western world, and Dubai crude,25 which serves as a benchmark for countries in the east, has been narrowed down”. Even after bearing the shipping cost, the buying of US crude is posing itself cost competitive to the Indian refiners. Eighth, the current American president’s desire to reduce trade deficits may also make energy deals more lucrative for both the countries. The current deficit with India sits at around US $24 billion,26 and the massive shale oil purchases would be favourable in bringing this deficit down. It is significant to note that the deals by IOC and BPCL came within weeks of Prime Minister Narendra Modi’s visit to America where President Donald Trump talked of his country looking to export more energy and energy products to India, a step to resolve America’s trade deficit with India.27 Ninth, because of boom in the US shale, India is in a better bargaining position with its major oil and natural gas suppliers such as Russia and Iran. Tehran is offering to ensure vessels itself, as well as providing generous payment and freight terms, for the shipment of oil and natural gas cargos [24]. Like rupee–rial trade deal between India and Iran, India has signed rupee–rubble arrangements with Russia which goes in favour of India’s financial transactions. Tenth, the ongoing trade war between Washington and Beijing prospects for a better relation between India and the USA. Refiners in China have been the top buyers of American crude oil. But supply may slow down amid a growing trade war between Beijing and the Trump administration. “If China imposes tariffs, its refineries won’t buy US crude since it would cost more”, Sandy Fielden, Director of Research for Commodities and Energy at Morningstar, Inc., said. Therefore, the “US sellers would

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have to find alternative buyers” [25]. Under this juncture, India will be the better option and attraction for of the US energy market. Eleventh, while India has been contemplating for developing strategic oil and natural gas reserves, the USA has the expertise of managing strategic crude oil reserves, and this expertise could prove pivotal for India. Twelfth, if India is to join the Organisation for Economic Co-operation and Development (OECD) or seek an exemption for an entry to International Energy Agency (IEA) USA support is pivotal. By being a member of IEA, New Delhi would be eligible to join IEA oil sharing and reserving mechanism with the member countries, which could prove pivotal during a supply crisis [15].

9.5 Shale, OPEC and West Asia Market—Prospects for India The market narrative of the oil-consuming countries is going to be largely effected by an interplay of supply cuts of OPEC and rising US shale output.28 Even as OPEC and its non-OPEC partners withdrew 1.8 mbd from the market, the US exported a record 1.3 mbd at the end of May 2014 [14]. In the year 2018, there was also the decision for production cut to keep a sizeable oil profit. But, the risk for the OPEC is that this sort of market share is hard to recover once the self-imposed production cuts are lifted.29 However, the Indian refineries have shown that they can be quite flexible in the crude slates they process and it appears that the output cuts30 instituted by OPEC and its allies are encouraging more diverse sources of supply for the Indian energy requirement. And as India shows, the battle is far more than just a simple OPEC versus the US shale. It is reminiscent that for the past years, the OPEC has been charging a rate higher than normal, something that India has been lobbying to get reduced.31 New Delhi has been raising the issue “premium” with the OPEC countries over the last few years. Being the third-largest oil consumer, India demanded at a meeting of OPEC members and non-members that the premium be removed. India has been constantly pushing for a discount instead of “Asian Premium” charged by the OPEC. Dharmendra Pradhan, Minister of Petroleum and Natural Gas of India, is pressing for an “Asian Dividend”, instead of “Asian Premium”.32 The OPEC charging of premium on crude exported to Indian companies reduces their competitive advantage in the global energy market. Despite repeated attempts by India, OPEC remains dispassionate about the discriminatory pricing practice. Since the global oil supply dynamics has been steadily changing, Dharmendra Pradhan said that the global oil industry has stood at a delicate crossroad and any attempt to frustrate or assign lower importance to the Indian demand would be detrimental to the suppliers.33 In a tweet, he further focused on global consensus for a “responsible and reasonable pricing for both producing and consuming nations” [21]. While the OPEC nations were still deliberating on the action to be taken, India moved ahead by ordering for US shale. This move again was a symbol and message in order to put pressure on the OPEC

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countries. Although the present import from USA is too small to move the needle, it is definitely going to turn heads in the OPEC as the cartel struggles to find new markets, consolidate the existing market and cope with the environmental awareness pressures against pollution caused by hydrocarbon. Since the oil-importing-dependent countries are exposed to the volatilities of international oil price, import costs can be destabilizing for government balance sheets and foreign exchange reserves. The Indian government strategically wants to diversify its suppliers so as to reduce its overdependence on OPEC and West Asian oil suppliers. Currently, 86% crude oil, 75% gas and 95% LPG are imported from OPEC,34 and India is reviewing its fossil fuel import strategy, especially with the suppliers from West Asia and looking towards the USA in the global supply glut. “Diversification of supply sources will henceforth benefit India by increasing competition among oil suppliers”, said Abhishek Kumar, Analyst at Interfax Global Energy in London. The OPEC’s own forecast also indicates that US shale will drive global production growth in the coming years and could possibly play the pivotal role in balancing oil prices. Under these emerging circumstances, India is forced to look for alternative oil and gas sourcing destinations beyond its traditional partners. To cut its dependence on OPEC, India should harness the opportunities that knocks at its doorstep to diversify its oil and natural gas sourcing. Increase in sourcing of crude and natural gas from the USA may make OPEC rethink India’s proposal on “Asian Dividend”,35 since procuring oil at the cheapest price is significant for the Indian economy. The Indian Oil Minister Dharmendra Pradhan recently raised his concerns over rising crude and its negative implications on consumers before the Saudi Energy Minister Khalid Al-Falih [26]. As a result of higher supply in the international energy market, the Dubai oil, Brent and West Texas Intermediate (WTI) fields have fell in favour of the western oil fields. This made importing oil from the USA cheaper than those from the OPEC or West Asia region.36 Further, the tight shale oil and middle distillates are preferable to West Asian oil. From the Asian perspective, India and China are in talk for creating an “oil buyers” club which will be able to negotiate for better prices with oil-exporting countries, so as to reduce OPEC and West Asia’s influence in global oil pricing [18]. The proposed oil alliance consisting of oil-buying countries, including South Korea, India and Japan, is expected to be made up to resolve the challenges posed by the OPEC and West Asian countries [26]. Congruence to diversify its supply basket, and despite the overall growth in India’s crude demand in 2017, the volume of imports from West Asia has dropped by 0.5% to around 2.75 million bpd, according to data obtained from sources and compiled by Thomson Reuters Oil Research and Forecasts. Saudi Arabia has lost its status as India’s biggest oil supplier, with imports from the kingdom dropping 8.9% to around 747,900 bpd, the data showed. Other losers from West Asia included Iran, with a 0.5% drop to 470,500 bpd, and the United Arab Emirates with a 16.5% slump to 288,500 bpd. The exception is Iraq with which India’s import has increased from 12.2% to 885,900 bpd due to Baghdad’s willingness to offer larger discounts on its heavier grades of crude compared to similar grades from other exporters in the region.37

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9.6 Shale Versus Environment Although the development of shale gas has been transformative for global gas market, the practice of fracking remains extremely controversial. New York state has already announced a ban on fracking throughout the state in spite of the fact that it has some of the most prolific reserves in the country. As fracking has progressed, concerns over water availability and contamination have ebbed and the poisoned water sources may eventually lead to cancer [2]. Not only in USA, the risk of negative impact has become a matter of concern in other parts of the world. The Netherlands, Germany, France and some other European states are thinking of banning of shale explorations. The environmental consequences seem much worse than what the gas is worth. Since the fracturing of underground rocks requires heavy loads of water, the process pollutes nearby soils, minerals and water that surrounds the shale reserves. And, this happens, when the poisonous mix of chemicals and carcinogens in the process of fracking seeps into the groundwater. For a country, weak in implementation of environmental laws, fracking can be extremely harmful. Further, since a large number of shale rocks are formed under the marine conditions, the connate water that is used during the fracking process is highly saline in nature. This water, along with the proppants used for fracking, can potentially degrade the groundwater reserves present in those areas. The use of methane, benzene and undisclosed toxic chemicals poses threats to soil fertility, besides causing birth defects and cancer [2]. Although the critics warn that fracking damages the drinking water aquifers, the shale industry argues that this is highly unlikely, as the fracking takes place a mile or more below the drinking water aquifer and is separated by thick layers of impermeable rocks. Moreover, the industries claim that it has a great deal of experience with fracking: more than a million wells have been fracked in the USA since the first fracking happened six decades ago. Nevertheless, the issue is not only confined to what goes down, but also what comes back—the water that flows back to the surface. This is the “flow back” that comes out in the form of “produced water” from the shale wells over time. This water needs to be handled properly, managed and safely disposed. Three things can be done with the flow back and produced water. It can be injected into deep disposal well, or put through treatment facilities, or recycled back into the operations. In traditional oil and gas states, the wastewater has often been re-injected. However, in the context of shale in the present scenario, the new large-scale water treatment facilities are being developed and the industries claim that they are capable of recycling 70–80% of the flow back. There is also intensive focus on innovation. These include developing new methods to reduce the amounts of water going in and to treat the water coming out, the drilling of more wells from a single “pad”, so as to reduce the footprint [9]. The most recent concern is “migration”—where methane leaks into water wells as a result of fracking. This is a controversial subject. In some cases, contamination in water wells has been tied to shallow layers of methane, not the mile-deep deposits of shale gas where fracking takes place. In other cases, water wells may have been dug through layers of naturally occurring methane without being adequately sealed. However, it is difficult to know

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“baseline” data and the gas developers are now taking into such measurements before drilling begins in order to establish whether methane is pre-existing in water aquifers. Responding to a heated environment debate, Obama in 2011 established a committee of the Secretary of Energy Advisory Board to examine these issues. The committee reported back with a series of pragmatic recommendations about best practices, regulations, measurement and technological innovation, which would contribute to continuous improvement in various aspects of shale gas production [9]. India, having a population of 1.3 billion, is facing the problem of water scarcity and the groundwater levels depleting at an extremely alarming rate, and according to Chesapeake Energy, about 65,000–600,000 gallons of water are required to drill one well of shale energy [6]. India does not possess the socio-economic conditions and technological advancement that could potentially support the exploitation of new shale oil through the process of fracking. Some of the scholars argued that adopting the fracking process in India is like welcoming the evil that has already been kicked out of the developed nations. According to K. Ravichandran, the senior Vice President and Group Head of corporate sector ratings at ICRA Ltd. said, “A big challenge to acquire huge tracts of land needed for shale exploration also require a huge amount of water for pumping in those areas” [2]. In India, getting environmental approval is another challenge as most of the reserves are in mountainous, jungle and tribal areas. In the context of water shortage, India has to act fast to develop its estimated 63 trillion cubic feet (TCF) of shale gas resources with low water-based fracking technologies.38 However, the cooperation of USA on water issues is very important since the USA has initiated and developed technologies that will be environment-friendly. In America, research has been developed, how the new technologies are using far less or no water at all the levels of exploration could materialized and the federal government has established interaction with the local and state regulators to learn more about this technology and foster production. The USA has a rich technological experience which could be shared with the Indian counterparts. Further, the US government has assured Indian counterparts to facilitate a high level of interaction and training in research and shale exploration activities in both the countries. An Assessment Since the American shale gas is available in the international market and energy thirsty countries are in queue to buy, New Delhi needs to grab the opportunity. The shale gas has become an increasingly important and strategic resource in the USA since the start of this century. The huge domestic shale reserves and its exponential exploration have transformed the US energy market from largest energy importer to net exporter. In the international energy market and global geopolitics, the shale gas is supposed to prove itself as promising alternative, “game-changer” and a self-reliant approach, in the American energy tryst. This can substantiate with the fact that for a long the US policymakers were worried of increasing American dependency on energy imports, insecurity and together with rising prices, which severely constrained American geopolitical influence. With the revolution in shale energy, a tectonic shift has developed in international relations which has promised for US global interest in future. Shale gas deeply modified the US economy and will certainly change

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the global geopolitics in the coming years. Yet, energy revolution in USA much depends on the attitude of foreign countries towards shale gas exploration: Will those countries decide to exploit it or not? The environmental impact and issues weigh heavily on this matter. It is certainly reckless to start a large-scale shale exploitation without a good knowledge of its environmental effects and technological outcomes. Additionally, profit and price question remain uncertain about shale gas and its future prospects. Are the potential shale resources accurately estimated? If yes, is it feasible to exploit? For instance, the shale gas can be located in places with low availability or no water, where water fracking method is little possible or less effective. What are the genuineness of the claim of environmental consequences and how long time the government will take to resolve the outstanding issues? These questions are somehow critical, where government interventions required fast. But, significant to note, the US technology is quickly improving and the USA is progressing fast on these matters, leading the way and economics imperatives to convince the Americans and international buyers and investors, and considering that the European and Asian markets will be favourable for the American shale industry, its technology, research and development. Nevertheless, as the production has increased and skills developed, the production costs are coming down, and the shale gas is proving to be competitive and cheaper than the conventional natural gas in near future. Further, research is in progress to certify that the used water is recycled or reused, and underground water is not contaminated. However, USA in its quest for the Indian market faces some potential issues. Firstly, India–US energy cooperation is not without hurdles or challenges. India’s state-owned upstream player Oil India Ltd. has decided to exit a shale exploration and production project named Niobrara asset—in the Denver–Julesburg Basin in Colorado due to lack of returns. The company is, however, waiting for the project’s valuation to improve before selling its stake. “We want to exit because we are not getting any returns from the project…but we have put it hold for the time being because of low valuations”, said the Oil India official, who did not want to be named [27]. The US shale industry has been hit badly by the uncertain oil price environment. As a result, there has hardly been any activity in the Niobrara project over the past few years, and the US energy sector has been seen with many ups and downs due to the prevailing commodity price scenario, as revealed by the OIL in its Annual Report, April 2016–March 2017.39 Secondly, India is seeking for special exemption to import LNG from the USA and till date the US Department of Energy (DOE) has approved exemption only from seven liquefaction terminals for export of LNG to the countries with which America does not have a free trade agreement (FTA). Nevertheless, in keeping with the shared objectives to provide a stronger business orientation to India’s energy quest, both sides have noted with appreciation the growing investment of Indian companies in the USA and the beginning of oil and gas exports from the USA to India.40 At present days, India–US energy cooperation is not revolutionary in nature. Not surprisingly, the Indian energy officials find purchase of US crude as a “trial run” and “test refining”, with the imports being in a competitive tender rather than a long-term contract of the kind that New Delhi has developed with the established oil suppliers. But it is pertinent to say that the shale gas revolution will

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complicate the world’s hydrocarbon supply and allocation, so that the traditional suppliers of energy will definitely lose some ground in the international energy market, and geopolitical relations will foster between India and the USA. Further to add, the US companies drilling for oil and gas in the shale formations are looking vigorously for powder-like gum (gaur gum) made from the seeds of guar beans. The boom in American business has created a condition for the small-scale farmers in semi-arid and arid regions of India to export their beans to US market. Since India produces about 70% of the world’s such beans, American dependency on this sector is expected to increase in the near future and the complimentary interests of both the countries will bind them together for their mutual interest of energy security. End Notes 1.

‘Why India’s import of US shale oil is a big deal’, October 4, 2017, https:// www.moneycontrol.com/news/business/economy/why-indias-import-of-usshale-oil-is-a-big-deal-2404081.html. 2. World Shale Gas Resources, https://geology.com/energy-world-shale-gas/, Republished from Energy Information Administration (EIA). 3. ‘The Shale Gas Revolution: What You Need to Know’, Allegro Development, 2013, http://www.allegrodev.com/whitepapers/Allergo-The-Shale-Gas-Revolu tion.pdf and Sebonti Ray Dadwal, p. 29. 4. Blueprint for a secure energy future, The White House, March 30, 2011. 5. Natural gas prices in 2017 and 2018 are expected to be higher than the last year, US Energy Information Administration, US Department of Energy, January 23, 2017, at https://www.eia.gov/todayinenergy/detail.php?id=29632. 6. ‘Prosperity at Home and Strengthened Allies Abroad-A Global Perspective on Natural Gas Exports’, The Policy Paper Series-Transforming Ideas into Solutions, The US House of Representative Committee on Energy and Commerce under the Chairman Fred Upton, vol. 3, no-1, February 4, 2014, http://energycommerce.house.gov/sites/republicans.energycommerce. house.gov/files/analysis/20140204LNGexports.pdf. 7. World Shale Gas Reserves: An Initial Assessment of 14 Regions outside the United States, US Energy Information Administration, Department of Energy, p. xii-30. 8. ‘India and US to join hands for gas hydrates’, September 26, 2014, Business Standard, https://www.business-standard.com/content/b2b-manufacturing-ind ustry/india-and-us-to-join-hands-for-gas-hydrates-114092600811_1.html. 9. India-US Strategy Energy Partnership Joint Statement, Press Information Bureau, Government of India, Ministry of Petroleum and Natural Gas, April 17, 2018, http://pib.nic.in/newsite/PrintRelease.aspx?relid=178727. 10. Both Trump and Modi in this meeting decided that India would purchase 7.85 million barrels of crude and 5.8 million tonnes of LNG from the USA, in Gupta, Sishir, 2018. ‘US energy Secretary Rick Perry to meet Union minister Pradhan, Goyal to discuss crude oil, cleaner coal’, The Hindustan Times, February 18, https://www.hindustantimes.com/india-news/us-energy-secy-

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12.

13.

14.

15. 16.

17.

18.

19. 20.

21.

22.

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rick-perry-to-meet-union-ministers-pradhan-goyal-to-discuss-crude-oil-cle aner-coal/story-pj5mskLurRh3LwmRz7PFyO.html. And, India-US Strategy Energy Partnership Joint Statement, Press Information Bureau, Government of India, Ministry of Petroleum and Natural Gas, April 17, 2018, http://pib.nic.in/ newsite/PrintRelease.aspx?relid=178727. India-US Strategy Energy Partnership Joint Statement, Press Information Bureau, Government of India, Ministry of Petroleum and Natural Gas, April 17, 2018, http://pib.nic.in/newsite/PrintRelease.aspx?relid=178727. Development of strategic petroleum reserves was discussed during Dharmendra Pradhan’s visit to Washington in June 2016, where he discussed the matter with the US Energy Secretary Ernest Moniz. India-US Strategy Energy Partnership Joint Statement, Press Information Bureau, Government of India, Ministry of Petroleum and Natural Gas, April 17, 2018, http://pib.nic.in/newsite/PrintRelease.aspx?relid=178727. USISPF Briefs Secretary Rick Perry on U.S.-India Energy Collaboration, February 7, 2018, https://www.usispf.org/pr/usispf-briefs-secretary-rick-perryon-us-india-energy-collaboration. As per the Agreement, the Cheniere Energy will sell about 3.5 million tonnes of LNG a year to GAIL. GAIL (India) Limited (GAIL) has already made a contract with Cheniere Energy, USA, to buy 3.5 MT/annum of liquefied natural gas (LNG) for 20 years. Jacob [20]. USISPF Briefs Secretary Rick Perry on U.S.-India Energy Collaboration, February 7, 2018, https://www.usispf.org/pr/usispf-briefs-secretary-rick-perryon-us-india-energy-collaboration, and Gupta [28]. ‘Why India’s import of US shale oil is a big deal’, October 4, 2017, https:// www.moneycontrol.com/news/business/economy/why-indias-import-of-usshale-oil-is-a-big-deal-2404081.html. India allows import of crude oil only on Indian carriers, but US oil can only be imported only though VLCC, which requires foreign vessels. The statement of IOC Director (Finance) Sharma, A. K. 2017. ‘IOC buys first shale oil, steps up imports from US’, August 13, Business Standard, https://www.business-standard.com/article/markets/ioc-buys-first-shaleoil-steps-up-imports-from-us-117081300194_1.html. ‘India needs to trim its overdependence on OPEC crude oil’, DNA, https:// www.dnaindia.com/analysis/column-india-needs-to-trim-its-overdependenceon-opec-crude-oil-2566587. ‘IOC buys first shale oil, steps up imports from US’, Business Standard, August 13, 2017, https://www.business-standard.com/article/markets/ioc-buysfirst-shale-oil-steps-up-imports-from-us-117081300194_1.html. ‘Prosperity at Home and Strengthened Allies Abroad-A Global Perspective on Natural Gas Exports’, The Policy Paper Series-Transforming Ideas into Solutions, The US House of Representative Committee on Energy and Commerce under the Chairman Fred Upton, Vol. 3, Issue-1, February

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24. 25.

26.

27.

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29.

30. 31. 32.

33.

34.

35.

36.

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4, 2014, http://energycommerce.house.gov/sites/republicans.energycommerce. house.gov/files/analysis/20140204LNGexports.pdf. The statement was given by Gaurav Moda, oil and gas expert and partner of KPMG, in [22]. The West Asian crude is slightly lower grade than West Texas Intermediate (WTI) or Brent. A “basket” product that comprises of crude from Dubai, Oman or Abu Dhabi is heavier to a certain extent and has a higher sulphur content, thus clubbed under ‘sour’ category. While the Brent crude originates in oil fields in the North Sea between Norway and the Shetland Islands, the WTI is US-sourced. Both Brent crude and WTI are light and sweet, thus making these crudes more favourable for refining into gasoline. The present trade deficit level is an increase of the 2016–2017 level which was US $19.9 billion. ‘India needs to trim its overdependence on OPEC crude oil’, DNA, https://www.dnaindia.com/analysis/column-india-needs-to-trim-itsoverdependence-on-opec-crude-oil-2566587. ‘IOC buys first shale oil, steps up imports from US’, Business Standard, August 17, 2017. https://www.business-standard.com/article/markets/ioc-buysfirst-shale-oil-steps-up-imports-from-us-117081300194_1.html. ‘The India factor in OPEC versus US shale oil battle’, Business Line, https://www.thehindubusinessline.com/markets/commodities/the-indiafactor-in-opec-vs-us-shale-oil-battle/article23291015.ece. ‘The India factor in OPEC versus US shale oil battle’, Business Line, https://www.thehindubusinessline.com/markets/commodities/the-indiafactor-in-opec-vs-us-shale-oil-battle/article23291015.ece. In 30 November 2016, OPEC decided to cut production by 1.2 million barrels a day with effect from 1 January 2017. ‘Recent Shale Disruption May Lead to India, U.S. Market Surge’, Dec 8, 2017, http://selectenergyservices.com/shale-india-us-market-surge-oil/. ‘India needs to trim its overdependence on OPEC crude oil’, DNA, https:// www.dnaindia.com/analysis/column-india-needs-to-trim-its-overdependenceon-opec-crude-oil-2566587. ‘Why India’s import of US shale oil is a big deal’, October 4, 2017, https:// www.moneycontrol.com/news/business/economy/why-indias-import-of-usshale-oil-is-a-big-deal-2404081.html. ‘India needs to trim its overdependence on OPEC crude oil’, DNA, https:// www.dnaindia.com/analysis/column-india-needs-to-trim-its-overdependenceon-opec-crude-oil-2566587. ‘India needs to trim its overdependence on OPEC crude oil’, DNA, https:// www.dnaindia.com/analysis/column-india-needs-to-trim-its-overdependenceon-opec-crude-oil-2566587. ‘Why India’s import of US shale oil is a big deal’, October 4, 2017, https:// www.moneycontrol.com/news/business/economy/why-indias-import-of-usshale-oil-is-a-big-deal-2404081.html.

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37. ‘The India factor in OPEC versus US shale oil battle’, Business Line, https:// www.thehindubusinessline.com/markets/commodities/the-india-factor-inopec-vs-us-shale-oil-battle/article23291015.ece. 38. ‘World Shale Gas Resources: An Initial Assessment of 14 Regions outside the United States’, US Energy Information Administration, Department of Energy, p. xii-30. 39. Annual Report, 2016–2017, Ministry of Petroleum and Natural Gas, Government of India, 2017. 40. ‘India-US Strategy Energy Partnership Joint Statement’, Press Information Bureau, Government of India, Ministry of Petroleum and Natural Gas, April 17, 2018, http://pib.nic.in/newsite/PrintRelease.aspx?relid=178727.

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15. Ebinger, Charles, and Mehta, Vikram. 2017. Time to Act on U.S.-India Energy Cooperation. https://www.brookings.edu/wp-content/uploads/2017/…/2ndmodi_o_mehtaebinger.pd…. 16. Pradhan, S.K. 2015. Shale Gas in Indo-US Cooperation. Geopolitics V (IX): 62–65. 17. Singh, Animesh. 2015. Amendments in Coal Bed Methane Policy in Works to Encourage Output. The Pioneer, March 4. https://www.dailypioneer.com/2015/business/amendments-incoal-bed-methane-policy-in-works-to-encourage-output.html. 18. Paraskova, Tsvetana. 2018. India Allows Firms To Drill For Shale Oil, Gas Under Existing Contracts. OILPRICE.COM, August 1. https://oilprice.com/Latest-Energy-News/WorldNews/India-Allows-Firms-To-Drill-For-Shale-Oil-Gas-Under-Existing-Contracts.html. 19. Vaid, Manish. America’s First Energy Plan Can Reset India-US Energy Ties. Observer Research Foundation. https://www.orfonline.org/research/americas-first-energyplan-can-reset-india-us-energy-ties/. 20. Jacob, Shine. 2018. First US Shale Gas Reaches India; GAIL’s Dabhol Terminal Receives Cargo. Business Standard, March 31. https://www.business-standard.com/article/compan ies/first-us-shale-gas-reaches-india-gail-s-dabhol-terminal-receives-cargo-118033000617_1. html. 21. Bhaskar, Utpal. 2018. India-US Move Ahead on Strategic Energy Partnership. Livemint, April 18. https://www.livemint.com/Industry/3HRQhA5iLCYYz8t5ecTyjK/IndiaUS-moveahead-on-strategic-energy-partnership.html. 22. Rajendran, M. 2017. India Looks at Buying More US Oil to Reduce West Asia Dependence. The New Indian Express, October 18. http://www.newindianexpress.com/business/2017/oct/ 18/india-looks-at-buying-more-us-oil-to-reduce-west-asia-dependence-1676996.html. 23. Mahajan, Anilesh S. 2018. India’s Energy Push. Business Today, May 6. https://www.busine sstoday.in/magazine/cover-story/indias-energy-push-rising-oil-prices-opec-saudi-gas-transp ortation/story/275020.html. 24. Russell, Clyde. 2018. Column: U.S. Crude Exports to India Surge as China Intake Fades. Reuters, August 7. https://in.reuters.com/article/column-russell-crude-india/column-us-crude-exports-to-india-surge-as-china-intake-fades-idINKBN1KS0M4. 25. Tobben, Sheela. 2018. US Oil Sellers May Look to India as China Tariff War Escalates. The Economic Times, July 7. https://economictimes.indiatimes.com/markets/commodities/news/ us-oil-sellers-may-look-to-india-as-china-tariff-war-escalates/articleshow/64893080.cms. 26. Chakraborty, Debjit. 2018. China and India Want to Buy More US Oil to Counter Opec. The Economic Times, June 14, https://economictimes.indiatimes.com/markets/commodities/news/ china-and-india-want-to-buy-more-us-oil-to-counter-opec/articleshow/64587200.cms. 27. Samant, Shilpa, and Sharma, Sukalp. 2018. Oil India Plans to Exit US Shale Project, December 27. http://www.cogencis.com/newssection/oil-india-plans-exit-us-shale-project-valuation-imp roves/. 28. Gupta, Sishir. 2018. US Energy Secy Rick Perry to Meet Union Ministers Pradhan, Goyal to Discuss Crude Oil, Cleaner Coal. The Hindustan Times, February 18. https://www.hindustan times.com/india-news/us-energy-secy-rick-perry-to-meet-union-ministers-pradhan-goyal-todiscuss-crude-oil-cleaner-coal/story-pj5mskLurRh3LwmRz7PFyO.html.

Chapter 10

The Way Forward

The chapter provides an insight into the findings of each chapter, and relations and comparisons between or among the chapters, action plan for future oil and natural gas resources and the option for renewable energy so as to meet India’s International responsibility to reduce carbon emissions in its consumption pattern and enrich India’s energy basket.

10.1 Summary India’s industrialization, domestic energy requirements and its quest for diversification of energy sources, rapid geopolitical changes and the need for an uninterrupted, affordable and reliable supply of hydrocarbon, are the prime factors which have pushed India to look for its better footprints in the international energy market. Given India’s fast-growing economy, steep consumption of energy, and near stagnant oil production, its dependence on import of oil and natural gas is going to gear up in the forthcoming years. In its quest for energy security, since the independence, India’s energy trade and investment in the oil and natural gas assets abroad has passed through different phases. During the colonial period, and even till 1991, India’s energy requirement and fossil fuel consumption was less due to slow industrial and economic growth. However, the beginning of India’s liberal phase of economy reversed the trend. Thus, the fast-growing economy and rapid developmental acts of the government necessitated for more imports of energy resources. In its quest for diversification, in addition to traditional suppliers of energy like West Asia and Russia, India has imported oil and natural gas from Africa, Central Asia, Latin America and Caribbean and the USA. Further, it is trying to have its better presence in the disputed South China Sea and Arctic region. Further, LNG supply through the pipelines, building of strategic oil reserves, exploration of new oil blocks and shale discovery in India are some of the new and major initiatives to expand its energy quest. However, in its quest for energy security, India faces challenges due to internal © Springer Nature Singapore Pte Ltd. 2020 S. K. Pradhan, India’s Quest for Energy Through Oil and Natural Gas, https://doi.org/10.1007/978-981-15-5220-5_10

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issues of the oil-rich countries and external geopolitical dynamics, which have been well explained through the various chapters. Africa, which is well endowed with the hydrocarbon resources, is beset with civil wars, challenges to democracy, corruption and lack of transparency, although there are not the fact for all the oil-producing nations in Africa. India faces tough challenges in Angola, Chad, Sudan, South Sudan, Democratic Republic of Congo, Libya, Nigeria and Equatorial Guinea. Further, the environmental issues in the Niger delta, Ogoniland and Imo River, complicates the situation. Although the rhetoric of “new scramble” for resources looms large in the African energy market, India, in fact, is not falling to this fulcrum. Rather, the western economic powers and China are targeted for their tactics to grab Africa’s energy and other natural resources. India is well welcomed by the African countries—starting from the citizens to the heads of the government and African Union for its efforts towards the restoration and promotion of democratic values, human resource development, infrastructural deeds and taking into account the expectations of the civil society in the African continent. Unlike Africa, West Asia is the traditional market of India for its energy requirements, from where India imports the largest volumes of oil and natural gas resources, and has a huge investment in the energy assets there. Further, while African problems are basically from within the country concerned, the West Asian challenges are basically due to involvement and interreference of the regional and global powers. The region is highly volatile due to intense geopolitical involvements and interferences, security threats and civil wars. The regional powers like Saudi Arabia and Iran have been on loggerheads on ideological and power counts and Yemen is the victim of their confrontations. Saddam’s Iraq irked USA and its energy interest, and the outcome was Gulf War-I and Gulf War-II, where a large chunk of oil was burnt by the Saddam government to misguide US airstrikes. As a consequence, many a times, the global oil price has been increased due to supply disruption and resulted production cut. The Arab–Israel War (1973), although a regional war, reminds the energy policy makers, how the Arab oil embargo against the US panicked the international community. The Iranian Islamic Revolution, freezing of foreign oil assets and hostility between Tehran and Washington are clearly indicatives of how the conflicts led to a security issue. The Arab spring and ISIS (IS) militancy led to oil black market and production and supply disruptions, particularly in Syria, Libya and Iraq. India, although not much effected by the geopolitical and security challenges yet the situations in West Asia, has posed as a constant challenge for Indian trade and investment there. Under the geopolitical confrontations, India aptly applies its approach of noninterference in other countries domestic affairs and adheres to resolution of issues through a peaceful and democratic manner. Yet, in the process, India faces tough challenges in balancing its bilateral relations with Iran, Saudi Arabia and the USA. Although India is well convinced that the Iranian nuclear programmes is not for the production of nuclear weapons, yet India has been under the influence of the USA to cut its oil and natural gas imports from Iran, and finding no other better option, New Delhi voted against Tehran on its nuclear programme in the United Nations. Although the Central Asian region has witnessed less security threats along with no production and supply disruption, yet, like West Asia, the region has been in

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intense geopolitical rivalry in one form or other. The “Great Game” in past, and the “New great Game” today, have brought the region under intense geopolitical and economic competitions for natural resources, and thus involvement and interference of major powers like USA, China and Russia in the region. While USA wants to consolidate its footprints, Russia claims its sphere of influence in the region which were once the territories of Russia, and if possible an assertive role today. The new but the powerful economic country China through its tactical move has already established its stronghold in the Central Asian resource market, and its approach seems more of economic than strategic confrontations. India was much comfortable with the Soviet Union while doing trade and investment in the Central Asian parts since the region was under the sovereignty of Soviet Union. Soon after Soviet disintegration, India faced competition because of large-scale Chinese investment and US entry into the region with a massive energy infrastructure projects and external powers “involvement” in the domestic matters of the countries through various colour revolutions. Like US–Russia geopolitical competitions, China does not want neither Russia nor USA to take mileage where Beijing’s energy interest will be compromized. It has expanded its trade and investment and bypassed the territories of Russia in its pipeline pursuits. China’s mammoth trade with Central Asia definitely brought India–China competition in the energy market where New Delhi finds it tough to stay in the competition. Significantly, India’s “Connect Central Asia Policy” for its economic and political interests in the region is a pro-active and pragmatic approach to engage the countries better. But, the execution of policy has yet to take a higher discourse. Like Africa, West Asia and Central Asia, the Latin America and Caribbean (LAC) has its unique potentialities, along with issues of concern, that draws the attention of the Indian government in its quest for energy security in this region. India has trade and investment ties with all the oil- and natural-gas producing countries here. However, the challenges are internal or regional as well as external pressures. Internal challenges are in the form of tariff regimes, rigid markets, regional and sub-regional trade regimes, internal conflicts between the countries and frequent policy changes by the concerned governments. The socialist policies in past as well as at present in different countries have created situation where the countries and companies find it tough to do business. As a result, western sanctions and compelling influential pressures effect India’s trade and investment. A high sense of instability and uncertainty crops up in the LAC energy market. In Venezuela, diverting PdVSA money for the socialist measures and curtailing of its autonomy, anti-west policy of Hugo Chavez and his regional politics and conttroversial role in OPEC have resulted in paucity of fund for research and investment in the hydrocarbon sector of the country. Further, the anti-west approach under the garb of Bolivarian revolution, and conflicts with Colombia, have aggravated the problem which has culminated to an economic crisis and political instability in the country in the contemporary period. As a consequence, western countries have reduced oil exploration and import from Venezuela under the sanctions. India is cautious to do trade with Venezuela because of the latter’s shortage of hard currencies, assets nationalization policy in past, and the growing confrontations between Venezuela and the United States. India has prompted its oil companies

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to avoid American banks in the financial transactions. Although its explorations acts are well secured yet its crude import is expected to decrease due to international pressures and domestic issues. All these are the security and geopolitical challenges that India has confronted, apart from the Chinese competition as it happens in other regions. But, if compared to other parts of the world, India’s foreign policy and acts towards the LAC is negligible. While we have reached and developed robust relationship with other regions or countries in the world, our policy towards this region is not assertive, and to an extreme sense, the region is neglected in our foreign policy discourse. However, the assertive foreign policy pursuits and energy security strategies today prompts for a stronger relationship between India and the LAC. While the above-mentioned regions in the world are the old or newly established markets for India’s energy quest, the Arctic region poses as a new destination with a promising future to explore. Arctic exploitation is hazardous to the environment. But, the melting of ice possesses opportunities for the countries in the region as well as for the global community for harnessing of existing resource potentials there. But, the geostrategic location and conflicting territorial interests makes the region a hot bed of power politics and military engagements by the littoral countries. The four prominent parties to the Arctic–Canada, USA, Russia and European countries, on many instances have divergent stands on the Arctic and they do not want to expand the existing Arctic Council on the ground that the littoral countries will lose their prominence on the Arctic matter. Apart from the environmental implications such as increasing temperature and risk of oil spills, it is very tough to harness the resources there due to extreme climatic conditions, and non-sophisticated technologies to drill. India has not expanded its footprint in the Arctic region, yet its presence is felt in the Arctic Council, developed research observatory in North Sea and looking for investments in the Russia’s east Siberian coast. The possibility of opening of North West passage due to the ice melting will create a shortest route that will connect North Atlantic Ocean and the Pacific Ocean. As a development, there will be a largescale movement of cargos and ships in the Arctic Ocean, geopolitical and security implications. Since India’s role is fast-growing in the global geopolitical scenarios, New Delhi has natural claims for its presence and security in the region. While Arctic takes a longer period to harness, the South China Sea (SCS) is much exposed to exploration of its existing oil and natural gas resources, where the new discoveries have already begun. However, in the process, the territorial disputes among the countries, basically between China and rest of the littoral countries have created an intense geopolitical and security threats for energy trade and investment. The defiant China not ready to accept that the sea is shared with other littoral countries; rather, it claims that the sea is exclusively under its sovereign jurisdiction. In most of the cases, India’s investment or drilling in this troublesome region brings China closer to confrontation. While claiming SCS, Beijing assures India and the international community for free passage; however, the intricacy of international law, Chinese non-compliance to the decisions of the internal tribunals, and powerful China, puts shadow over the prospect of sea lane security and exploration of oil and natural gas in the SCS.

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The crude or LNG from the above-mentioned regions and countries are imported through the ships, tankers or rail networks. However, simultaneously, India is looking for import of these resources through the pipelines which will pass through the continental territories and sea waters. Many times, the pipeline supply of energy is treated as a more safe and reliable mode of transportation than the other means. However, this is relatively true when there is political instability and insecurity in the country concerned through which the pipeline passes. Further, pipelines are not free from sabotage. Yet, pipelines have two important characteristics which attracts the energyconsuming countries most. First, it is a faster mode of supply; and second, cheaper to transport energy. India has opted pipeline as one of the viable and supplementary approach to import oil and natural gas resources. However, in the process, it faces the problem of geopolitical and security challenges which have been explained through the various pipeline projects, initiatives and ideas. The Turkmenistan-Afghanistan– Pakistan–India (TAPI) pipeline is a viable project, and according to Gurbanguly Berdymukhamedov, the President of Turkmenistan, “TAPI is designed to become a new effective step towards the formation of the modern architecture of global energy security, and a powerful driver of economic and social stability in the Asian region”. But, its progress is slow due to militancy in Afghanistan and Pakistan. Further, militancy in Afghanistan and Pakistan, cross-border terrorism and political differences between New Delhi and Islamabad, stumbles the smooth progress that puts shadow over the security of pipeline in the transit routes. Therefore, while TAPI has been the hostage of security challenges of Afghanistan and Pakistan, the MBI is largely the hostage of domestic politics of Bangladesh, where pro-India and antiIndia rhetoric largely shapes the political discourse. Under this delayed project of MBI, China has got benefitted. India still has options, and Myanmar is ready to supply its natural gas from other fields. Sheikh Hasina, today, is ready to cooperate in the execution of the project, but Dhaka is not yet clear over its earlier demands of free transit corridor, waive of trade deficit and hydroelectricity import from Nepal and Bhutan through the Indian territory. If the project is not getting materialized, India has alternative approach, that is bypassing Bangladesh territory and running the entire pipeline through the Indian territory which is bit expensive. Like MBI, the Iran-Pakistan-India (IPI) pipeline is not yet materialized although the reason is different. The USA does not want this pipeline get materialized since sanction-hit Iran will get sufficient revenue to overcome the hardships caused by economic sanctions, Tehran–New Delhi relationship will thwart Iran’s isolation at the international level and Iran’s larger role in the Indian Ocean region. In comparison to all these pipelines, The Russia–China–India (RCI) pipeline does not have tumultuous route and political hassles, but it is not yet clear how the pipeline will pass through the mountainous regions and restive Xinxiang province. Further, New Delhi finds it tough to rely on China which is a transit country and with which the country has border issues and bitter past. In addition to the region perspectives and pipeline pursuits, India’s countryspecific approach for its international quest for energy security has brought both Russia and the USA to the India’s energy map. The Russian republic, once weakened with economic crisis in the early 1990s, is resurgent under the assertive leadership

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of Vladimir Putin. The oil boom in Russia and increase of global oil price in 2007 largely contributed recovery of Russian recovery, which in turn, increased global role of Russia and its prominence in the international energy market. Russia’s rise inevitably resulted in conflicting geopolitical interests between Moscow and Washington and hot pursuits in the conduct of their internatioal relations which could be seen in Georgia, Ukraine and Syria. Russia strongly backs Iran—the historical rival of USA, sympathetic to Iran—backed Houthis rebels in Yemen and developed relations with Turkey, a NATO member. The increasing competitions, conflicts and involvement between two super powers—Russia and USA—have resulted in confrontations between west and Russia, and thus sanctions on Russian oil assets and officials by USA and some of its western allies. As a consequence, Russia’s Asia Pivot approach owes much prominence where India has posed as one of the potential markets for Russian oil and natural gas resources. The oil boom in Russia, western sanctions and decreasing crude price are the international developments which have urged India to fasten its energy trade and business with Russia. But, the litmus task for India is how to balance its relationship with USA vis-a-vis Russia. India has the largest overseas oil and natural gas investment in Russia, and the country is also very significant for India’s presence in the strategic Arctic resources and shale energy exploration. Like India, China is a potential buyer and investor which goes in competition with India for the Russian energy assets. Yet, Moscow does not rely much on Beijing for its increasing role in Asia, competition with its oil and natural gas companies, and undermining of Moscow’s sphere of influence in central Asia. The most recent development of Rubble-Rupee transactions in the bilateral energy trade between Russia and India will make Russian market more favourable for Indian financial transactions. Although India has the option to trade with the American shale energy, yet India is cautious with the country since the USA has a larger geopolitical interest, and it is very difficult to rely much on the intentions of US energy trade. On the other way, Russia is virtually a historical support for India’s claims on its national interests and global pursuits. While India is much comfortable with its traditional partner Russia for energy trade, the Indo-US cooperation has yet to take a deep root in their bilateral energy trade. The shale energy of the USA is not yet commercialized and its supply in the international energy market is yet to take a prominent role. The shale energy itself has its limitations because of excessive water use and water contamination, although a concrete conclusion on this matter is not reached. Both the countries have not developed to a stage where US technologies could be used for exploration of shale energy in India. India is also cautious of not being overdependent on USA that could lead to compromise of India’s core interest on global issues. However, there are some common grounds where both USA and Indian interest seems identical such a reasonable price on crude oil, flexibility of OPEC, and being less dependent on West Asian oil and natural gas market. The increasing cooperation between both the countries is expected to make a bargaining force to the challenges of OPEC price rise and overdependency on West Asian energy. The shale exploration is a positive sign to bargain with the global oil regimes and regions. Further, the initiation of energy cooperation is expected to lead a multidimensional and sector-specific cooperation,

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and overall deep-rooted relationship between India and the USA. However, the definite challenge surfaces in the form of balancing India’s relationship with Iran-the arch rival and Russia-the strategic competitor of the USA.

10.2 Action Plan The resource-rich Arica has explored potentialities and prospect for future exploration. India has already established its footprints and looking for more opportunities to harness in this continent. The new discoveries attract the Indian oil companies more than the other parts of the world. However, the challenges of political instability, corruption, irredentist groups and militants, Chinese competitions, “new scramble” rhetoric and increasing energy requirements in Africa putting some shadows on India’s large-scale investment in the continent. But, at the same time, there are hopes of brighter prospect for Indian energy trade and investment. Democracy has been taking its own course, and the initiatives for transparency measures by the government are much appreciable today. The concerned resource-rich countries of Africa while combating militancy in their countries will also look into the problems of the people from where the resources are extracted, and the local people should not feel that they are deprived of the benefits accrued from their localities. No doubt, China is a competitor to India and it will go on, but India should adopt a pro-active policy and extensive engagements with the African nations at the ministerial and cultural level, and follow a multidimensional approach for better engagement of the African nations in the energy sector-both conventional and non-conventional. In a globalized competitive market, it is natural that competition will take place, therefore, India’s human resource development initiatives, infrastructural development and civil society considerations, along with local participation and employment opportunities in the Indian trade and business practices, in Africa will largely shape India’s quest for future energy security. Further, India’s longstanding relationship with Africa and presence of a strong diasporic community there will enhance India’s trade and investment. Unlike China, India, as interpreted by the Africans, is a friend of all counts for the African nations. Therefore, the rhetoric of “New Scramble for Africa” is not applicable for India. Further, as there are worries of energy shortage in Africa, the discovered and undiscovered resources and new explorations will definitely subvert the future energy crisis in Africa. Moreover, the new discoveries of shale reserves in Africa will largely contribute meeting African demands and international expectations. Apart from these conventional and shale energy explorations, in Africa, there are huge and untapped non-conventional resources of energy. The vast stretch of warm Saharan desert, coastal landmass and sea waves will be the new trends of India–Africa energy trade and investment that will ultimately shape India’s foreign policy discourse towards the African countries. In West Asia, Saudi Arabia has a larger say, whereas Iran has a geostrategic location in the Arabian Sea and the Persian Gulf. While Saudi Arabia is rich with crude

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oil reserves, Iran is highly endowed with the natural gas resources. Both the countries are major suppliers of energy to India’s energy needs. However, since India’s demand for natural gas is increasing due to pollution and climate change issues, India, in future, will definitely look towards the Iranian natural gas than the Saudi crude. Further, the Saudi market is highly competitive due to rush, caused by all oilconsuming countries, and consequently, there has been no Indian investment in oil and natural gas asset except mere import of large volumes of crude and likewise the Qatar natural gas market. So, the traditional suppliers like Iran, Iraq and UAE, and emerging markets like Bahrain, should draw much attention of the Indian oil companies for investment in overseas assets. At the same time India’s engagement with Saudi Arabia is significant since it is a regional power, swinger or swing producer in OPEC, and a close ally of the west. Both Tehran and Riyadh have conflicting regional interests which have global ramifications, and India has well maintained a balancing approach towards these two countries. In future course of energy cooperation, New Delhi should continue its existing approach without getting entwined in their regional politics. The increasing trade and commerce relationship between Israel and other West Asian countries and normalization of Israel’s relationship with other countries in the region have open up new opportunities for more Indian investment in the oil assets of Israel, which was once objected by other Arab countries. As it is already mentioned that the region has witnessed constant disturbances in one form or other, sea lane security owes much prominence for the Indian armed forces. Various choke points need to be well guarded by the Indian forces along with the multinational forces. Further, India should diversify its energy basket further so as to reduce its over dependence on the geopolitically hot bed West Asia. The nineteenth century Soviet Union and the UK game plan today intersected among the great powers and emerging players in Central Asia. India, Russia, China, Iran and USA are involved in remeasuring the region with their spheres of influence and presence. Russia’s influence in its former dominions is guaranteed through largescale investments, presence of military bases and sizeable market shares in the energy market. Russia’s energy companies, further, attempt to gain additional influence and market shares in Central Asia [1]. China has already spread its presence in the Central Asian energy market, devoid of Russian territory, and USA attempting an inroad into Russian sphere of influence. Under this geopolitical competition, since India has no political intentions in this region it should concentrate for more economic gains accrued from this region. Since new discoveries have happened and probable reserves have a promising future, Indian government should have multidimensional economic arrangements and streamline Focus Central Asia policy in a more pragmatic and assertive manner so as to withstand Chinese competition. Further, Russian support and their companies’ joint ventures in the region will enhance complimentary energy interests of both India and Russia. It is a positive sign for India that the Central Asian nations have well recognized India as a neutral force to reckon and lessen the super powers role in the ongoing “New Great Game”. The LAC countries is much neglected in the Indian foreign policy discourse. Hence, India should establish more diplomatic offices to facilitate trade and business in those countries and appoint a coordinator in each Consular office to facilitate

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energy tie ups. Politically there should be more engagement through the regular and extensive visits by the Indian government officials, and inviting leaders and ministers concerned of those countries. Although a large number of potential oil producing countries are there India has not given sufficient attention for trade on energy sector. No doubt, there are some issues have cropped up regarding the distance and language that have hindered smooth process of trade. However, these are factors not hurdles today and significantly, India having similar problem with other parts of the world have far better and fast-growing trade and investment relationship than the LAC. No doubt, there are some issues of political instability, asset insecurity and regime issues. But, India having similar problems with the African countries is doing better than the LAC. Hence, there is the need for introspection for India’s interest in this region. The trade and investment potentials should be in the public domain and well marketed so that the Indian companies could better know and understand the potentials of energy trade and investment in LAC. Apart from the Indian perspective, the LAC countries should take into account the Indian concerns which includes rigid domestic policies and regional complexities. The Venezuelan domestic problems need to be resolved through a democratic process from within that takes into account the claims of civil society. Since economy is declining and energy sector weakening, the government should promote liberal policy approach with a certain degree of autonomy to PdVSA so that the foreign countries and companies will show their eagerness for further trade and investment in the energy sector. In the search for the probable last oil and natural gas reserves on the planet, the environment security is under pressure. The exploitation of natural resources in the Arctic thus threats the once pristine environment on the earth. The responsiveness of global players seems lack of seriousness. Dick Cheney, the former Vice President to George W. Bush and who has been the architect of the current US energy policy, focussed on increasing energy supply, by exploiting additional deposits of fossil fuels, instead of conservation measures and climate protection [1]. The littoral countries of Arctic are gearing up for new discoveries, whereas the non-littoral countries are looking for an opportunity to have their footprints. Further, the possible opening of North West passage will open up a new maritime landscape, and thus, India will have a natural stake in the region due to its geopolitical locations and rich natural resources. However, there is no easy inroad since the littoral countries have territorial disputes and the region is going to be highly militarized in near future. India is an outside country to the region. Yet, India’s better relationship with the Arctic Council will gear up for a larger presence of New Delhi. No doubt, Russia has offered an opportunity for Siberian energy trade and business; but India should be cautious that the other littoral countries are very watchful to Russia’s growing stakes in global geopolitics and international affairs. India’s controversial involvement in the region may lead to ouster of the country from the region or little scope for energy exploration. So, India must convince the Arctic council about its energy needs and geopolitical stakes, without getting entangled in their political and territorial disputes. In the SCS, India will face further problems in the exploration of oil from the disputed territories since there are vast stretches of territories claimed by littoral countries, and the melting of ice and emergence of new islands developing new complexities there. However,

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like China in SCS, Russia is a major claimant in the Arctic, and as oil companies in association with China feel better secured to explore in the disputed territories in SCS so as Indian companies will be better secured under Russia in the disputed parts of SCS. However, all these possible steps do not mean that India is not against Arctic exploration; but if the global community fails on this matter, India must not be the loser to harness the opportunities. In the context of SCS, sea lane security, unhindered access and harnessing of natural resources draws much attention of the Indian policymakers. But, problem is that Beijing is not respecting UNCLOS and may not adhere the same in future. So, India is left with one option that is India’s extensive engagement with the South East Asian nations, military presence as it has in Arabian Sea and strategic and military engagement with other stakeholders of the world so as to ensure a strategic balance in the SCS. In the context of energy pipelines, TAPI will be successful plan provided all the stakeholders work together to ensure that the negative forces inimical to the project are resolved, with the attitude that the bilateral and international relations are multidimensional, instead of unidimensional in orientation. Support of the local governments in Afghanistan and Pakistan through which the pipeline passes is of utmost importance to avert security threats. In the context of MBI, the gas pipeline between India and Bangladesh should not be the hostage of internal politics of Bangladesh. Dhaka should aim at setting the structures and motion of goodwill that will last long—who so ever the leader in power and political party in government. India may take some more measures in lifting some trade barriers so that a better sense of goodwill will develop. In doing so, hardly the Indian trade will get adversely effected. Diplomatically, New Delhi should convince the Dhaka counterparts that there are some misconception and misunderstanding pervades in the demands as set by the former. Further, taking into account the existing hurdles on the MBI gas pipeline, pressing domestic demands for more energy, and geostrategic location of Myanmar, India should pro-actively move for securing energy resources from Myanmar—either through MBI or a new route bypassing Bangladesh. For Bangladesh, in the context of looming natural gas crisis in a medium to a long-term future, Bangladesh should take MBI project forward. Without further delay, India should act for implementation of pipeline project—with or without Bangladesh which will be a crucial and first gigantic step to secure natural gas from Myanmar. In the context of pipeline with Iran, India may avoid the territory of Pakistan because of fractured relationship between the countries, and opt for an alternative undersea pipeline. No doubt, in the process, India will also face same problem of Tehran–Washington imbroglio as it faced in IPI. However, India has two options here: convince USA the pressing energy and geopolitical necessities for pipeline and energy trade, or New Delhi to go on its own way of bilateral energy trade and pipeline since Iran has a geostrategic location and economic significance for India. In these two circumstances, India can have more levers of bargaining with USA since there is no UN sanction against Iran today. However, unlike Iranian pipeline, there are no external powers pressuring India on its pipeline connectivity with Russia. Since, India and China are developing better relationship, pipeline through Chinese territory is viable, but, since India has geopolitical and boundary issues with China, India cannot rely much on the Chinese

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assurance. So, Russian pipeline through other means is a better option, provided it is cost-effective, such as India and Russia can have an option of swap arrangement with TAPI, or Russian pipeline in Central Asian can well connect to TAPI as R-TAPI so that India can import natural gas with a cheaper price which could be affordable for its citizens. Russia is a reliable partner for energy trade, and according to Dharmendra Pradhan, the Minister of Petroleum and Natural Gas of India, “The country is very much comfortable with Russia, and Russia is a key partner for India’s energy quest” [2]. At present, the Indian companies are buying Russian oil basically at a spot price. Since India is intended to diversify purchases, the Indian companies are exploring the possibility of importing Russian oil and natural gas under long-term contracts since New Delhi aims at building a low-pollution energy economy that will shape India’s future energy needs. But as the energy market is buyers’ market today, New Delhi will definitely see that it gets Russian supplies at a competitive price. Further, in its quest for energy security, India has to meticulously maintain a balancing role with both Moscow vis-à-vis Washington, and under this, difficult task India will face a daunting challenge in balancing the two because Russia wants to play a sizeable role in global politics while the USA is losing its ground on some major global issues like South Ossetia, Crimea, and Syria. In stead of falling to their conflicting geopolitical games, India must try to convince each other of New Delhi’s priority on global matters like energy requirements and energy security. India’s geopolitical position, global role, and its prominence as a fast-growing vast economy has a pivotal space for Indo-US partnership for diversification of their relationship and thus energy or shale energy has posed as a new and potential area of cooperation. The increasing relationship between the two countries is an opportunity to harness. However, the USA, being a super power and its potential global role, hints at India taking a cautious approach for a possible extensive energy cooperation. The Indo-US energy cooperation should not develop to a level where New Delhi could be blackmailed by Washington through oil diplomacy. Moreover, USA is a factor in Indo-Russian and Indo-Iranian energy cooperation. Indo-Russian energy trade is under the US shadowing since USA does not want a powerful Russia in international relations that could challenge its supremacy in global politics. Since Russia is a traditional ally, and USA is an emerging partner, balancing the both, and pursing its own independent foreign policy, while taking into account its own national interest, should be top-most priority for the Indian foreign policy makers as energy security constitutes one of the strategic and core interests that New Delhi wants to pursue and secure. Like Russia, Iran is a factor in Indo-US relationship, and Washington expecting India’s zero import of the Iranian hydrocarbon. However, Iran’s geopolitical role, strategic location and geo-economic significance prompts New Delhi’s interest for a better relationship with Tehran. The recurring tensions between USA and Iran throw the challenge for the energy and foreign policymakers. Therefore, what is needed, India should do maximum bargain with USA while trading with Iran and will convince the White House about the pressing needs for India–Iran energy ties. The USA should also introspect that any grave situation developed in Iran by the external powers will have a devastating impact on global energy flow

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and energy security. Expressing the significance of Iranian energy, importance of the Gulf, and the sea lane security, Dharmendra Pradhan said, “We are much worried about the recent unrests in the Gulf and Strait of Hormuz, the only way out of the Persian Gulf. It is one of the most important routes for the global energy supply. For India, about two-thirds of oil and half of the India’s LNG imports passes through this Strait. India expects that the security situation in the strait of Hormuz will remain calm, otherwise the country will face adverse consequences, including insecurity, volatility of oil and natural gas supply and steep price rise [2].” Moreover, Russian and American energy enriches India’s energy basket and its bargaining power with OPEC. India is a responsible buyer which wants a reasonable oil price with the assumption that low prices are equally bad for exporters and consumers that disturbs natural balance.

10.2.1 Quest for Renewables The pressing domestic requirements and international obligations prompt India to look for more renewable energy alongside the conventional sources of energy. The Intended Nationally Determined Contributions (INDC) or Nationally Determined Contributions (NDC) of the Paris Agreement, adopted in December 2015, is intended for reductions in the greenhouse gas emissions under the United Nations Framework Convention on Climate Change (UNFCCC). The INDC is a compromise between “Nationally Appropriate Mitigation Actions” (NAMA) and Quantified Emissions Limitation and Reduction Objective (QUELRO) that the Kyoto Protocol used to describe the different legal obligations of the developing countries and developed countries. Once the Paris Agreement is ratified, the INDC will become the first major greenhouse gas targets that applied to both developed and developing countries in an equal footing. India, with 4.1% of emissions, have ratified the agreement. By increasing an installed capacity of 175 GW renewable by 2022, India will be able to surpass its NDC target of reaching a 40% non-fossil capacity by 2022. With a 45% installed capacity from the non-fossil resources by 2030, emissions form the energy sector will subsequently decline by 11%, i.e. 375 metric tons of carbon dioxide equivalent (MTCO2 Eq.) [3] from a business-as-usual (BAU) development, considered as a baseline. Since renewable energy is highly cost elastic in the Indian market, a decrease in infrastructures can increase in penetration of renewable in the Indian energy market. Taking into account the developmental needs and international commitments, the IEA predicts, India is likely to account for a 25% rise in the global energy demand by 2040. Hence, India needs to adopt a multi-pronged strategy that includes both non-renewable and renewable. A mix of decentralized and centralized solutions along with enhanced domestic production of renewable will well augment India’s quest for energy security. Since India is determined to achieve its developmental goals with the environmental compliances, the country is all set to increase its share of renewable in its energy mix. However, it is crucial for the Indian government to introspect, whether the country’s grid is well equipped to handle the supply

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of renewable energy. It is significant to note that India’s energy sector has a lay out for a sea change in its recent energy ambitions by 2022, which includes achievement of 175 GW of installed capacity of renewable, housing for all by 2022, 24 × 7 Power for all by 2022, 10% reduction of oil and natural gas import dependence from the 2014–2015 levels, establishment of 100 smart cities, need of clean cooking fuels, and meeting the INDC target as committed in COP21 in Paris [4]. However, beyond the projections of 175 GW by 2022, India still has vast and largely untapped potential reserves. The recent estimate implies a 20% increase in the existing potential and measurement. Accordingly, the wind energy constitutes 3000 GW, total solar PV 11,000 GW, biomass 10 GW and small hydro 5 GW, which could be achievable by 2047 [4]. Under the estimates, it is solar energy that assumes much significance to contribute largely for the Indian energy sector. Hence, India’s new foreign policy and diplomatic approach for the growth of International Solar Alliance (ISA) by the Indian government assumes much prominence for energy security. ISA, established on 30th November 2015 on the side-line of UN Climate Change Conference at Paris, 2015, is largely an initiative of India and France, and till date, there are 84 countries who have signed the ISA Framework Agreement, 63 countries ratified, and 121 Prospective member countries and Territories. Recalling the Paris Declaration the ISA has the shared ambition to undertake joint cooperation to reduce the expenditure cost of technology, fiancé the projects, and mobilize $ 1000 billion or more investments needed by 2030 for a massive use and installation of solar energy, and pave the way for future technologies [5]. Recognizing the energy-consuming countries, it is an opportunity for the countries lying fully or partially between the Tropics of Cancer and Capricorn to harness the natural resources. Being a coalition of solar resource-rich countries the joint collaborations have been identified to fill the research gaps in the renewable solar sector. However, the ISA is not a replicate or replacement to other international efforts such as International Energy Agency (IEA), International Renewable Energy Agency (IRENA), Renewable Energy Policy Network for the twenty-first Century (REN21), Renewable Energy and Energy Efficiency Partnership (REEEP), the United Nations bodies, etc., which are currently engaged in; rather, a comprehensive and sector-specific approach that will establish networks and develop synergies in a sustainable and focused manner. In the energy discourse, the ISA implies a recent shift in energy transition that strengthens the Indian quest for clean, affordable and sustainable energy security. The alliance also has foreign policy implications for India to ensure energy security. At the first Assembly of the International Solar Alliance at New Delhi in 2018, Narendra Modi emphasized that if the desire for “One World, One Sun, and One Grid” is materialized, ISA as an alternative to OPEC will not be an impossible task to achieve [6]. India is working sincerely towards the achievement of the goals of the COP21 through a production of 40% non fossil fuel-based energy by 2030, and for this objective, it is committed to Rs. 175 crore investments and expenditure for ASA. By November 2018, India spent 145 crore for building infrastructure, day-to-day recurring expenditure, conduct of meetings and creation of a corpus fund [6]. Further, India plans to help set up a global electricity grid that will

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start with grid network—connecting its neighbouring countries like Myanmar, Thailand, Cambodia, Laos, and Vietnam with the sub-continent as part of an evolving energy security architecture [7]. The global grid will aim to connect countries like Myanmar, Cambodia, Thailand, Laos and Vietnam. This can be possible since India has started supplying non-renewable to its neighbouring country Bangladesh and Nepal and has been leading for a SAARC electricity grid to meet electricity demands in the region [7]. However, there are challenges in achieving the objectives of ISA because of lack of proper mechanism for cooperation among the member countries, lack of detail information of the member countries’ resource potential, insufficient financial contribution for the organization and lack of much enthusiasm. However, it is not apt to say that the Alliance is a weak forum. It is in growth stage and like all other organizations, at beginning, the ISA is bound to face problem. Its success much depends, how New Delhi effectively leads the organization, and to what extent the energy consuming countries contributing for the Alliance.

References 1. Muller-Kraenner, Sascha. 2008. Energy Security: Re-measuring the World, 28–29. Abingdon: Earthscan (Routledge). 2. Petleva, Vitaly, and Arthur Toporkov. 2019. Interview of M/o Petroleum & Natural Gas to Vedomosti, Embassy of India, Moscow, Russia, https://indianembassy-moscow.gov.in/press-rel eases-04-09-19.php. 3. Thambi1, Simi, A. Bhatacharya, and Oliver Fricko. India’s energy and emissions outlook: Results from India energy model. Working paper, NITI Ayog, Government of India. 4. Kumar, H., M. K. Upadhyay, R. Bansal, R. Gupta, R. 2017. Energizing India: A Joint Project Report of NITI Ayog, 9. Government of India, and Institute of Energy Economics Japan (IEEJ). 5. International Solar Alliance. http://isolaralliance.org/ISAMission.aspx. 6. PM inaugurates first assembly of the International Solar Alliance, Ministry of New and Renewable Energy, Government of India. 2018. https://pib.gov.in/PressReleasePage.aspx?PRID=154 8295. 7. Bhaskar, Utpal. 2019. At solar alliance summit, Delhi to propose global power grid. August 22, https://www.livemint.com/industry/energy/at-solar-alliance-summit-delhi-to-pro pose-global-power-grid-1566496938758.html.

Index

A Arab-Israel war, 10, 11, 62, 77, 222 Asia Pivot, 175, 178–180, 226

B Blood oil, 10, 49 Buyers’ market, 65, 231

C Chevron, 21, 46, 114, 155, 208 Cold war, 10, 49, 62, 80, 88, 93, 103, 120, 135, 138, 177, 178 COP21, 136, 145, 156, 233 Corruption, 9, 45, 114, 122, 222, 227 Crimea, 169, 175, 179, 183–185, 202, 231

D Dharmendra Pradhan, 17, 28, 39, 67, 73, 109, 152, 170, 181, 187, 190, 203–205, 210, 211, 216, 231, 232 Dutch disease, 113, 122

E Environment pollution, 17 Essar, 37, 38, 106, 109, 158, 163, 182, 203 Extractive Industries Transparency Initiative (EITI), 55

F Footprint, 33, 38, 51, 63, 91, 92, 96, 107, 118, 135, 144, 156, 160, 165, 180,

188, 189, 208, 212, 221, 223, 224, 227, 229

G Gazprom, 97, 167, 168, 170, 176–181, 183, 187, 189 Great Game, 87, 93, 94, 223 Gujarat State Petroleum Corporation (GSPC), 38 Gulf War-I, 11, 61, 199, 222 Gulf War-II, 11, 61, 68, 71, 72, 77, 199, 222

H Hugo Chavez, 107, 113–116, 122, 223

I India-Africa Hydrocarbon Conference, 39, 40, 120 International Solar Alliance, 158, 233, 234 Intervention, 8, 10, 12, 20, 49, 50, 77, 79, 137, 139, 179, 184, 201, 214 Iran, 9, 10, 15, 16, 22, 25, 28, 61–68, 70–74, 76–82, 87, 91–93, 98, 115, 123, 151, 153, 154, 161, 164–169, 171, 172, 174, 177, 182, 184–186, 188, 197, 199, 209, 211, 222, 225–228, 230, 231 Iran-Pakistan-India (IPI), 16, 25, 78, 93, 151, 152, 161, 164–166, 168–170, 172, 174, 225, 230

J Joint Working Group, 24, 109

© Springer Nature Singapore Pte Ltd. 2020 S. K. Pradhan, India’s Quest for Energy Through Oil and Natural Gas, https://doi.org/10.1007/978-981-15-5220-5

235

236 L Lines of credit, 40, 53, 69, 163, 190 Liquefied Natural Gas (LNG), 9, 16, 17, 19, 21, 25, 26, 36–38, 40, 67–69, 81, 91, 107, 136, 142, 151, 152, 163, 166– 170, 172, 178, 180–183, 192, 200, 205–208, 214–216, 221, 225, 232 Look West Asia, 8, 15, 25, 37, 61–66, 68– 72, 74–81, 88, 92, 110, 128, 197, 200–202, 210, 211, 217, 221–223, 226–228

M Maritime security, 78, 144, 146 Mohammad Mosaddegh, 10 Myanmar-Bangladesh-India (MBI), 16, 25, 151, 152, 157, 158, 161, 162, 169, 185, 188, 225, 230

N New Great Game, 87, 93, 94, 99, 127, 137, 223, 228 New scramble, 33, 49, 222, 227 Nicholas Maduro, 114, 116 North East passage, 127 North West passage, 127, 146, 224, 229

O Oil and Natural Gas Corporation (ONGC), 19–24, 37, 39, 44, 46, 54, 66, 69, 72, 82, 90, 91, 108, 118, 119, 136, 143, 158, 160, 163, 168, 181, 186, 187, 192, 203, 204, 208 Oil curse, 11, 33, 44, 54, 112 Oil spill, 48, 127, 130–132, 145, 224 Oil swap, 25, 93 ONGC-Videsh Limited (OVL), 20, 21, 37– 39, 43, 44, 47, 66–69, 73, 82, 90, 106, 107, 109, 110, 119, 143, 158, 163, 181–183, 190, 191 Organization of the Petroleum Exporting Countries (OPEC), 4, 7–10, 24, 28, 29, 38, 62, 72, 112, 115, 116, 122, 185, 187, 191, 197, 199, 202, 208– 211, 216–218, 226, 232, 233

Index P Publish What You Pay (PWYP), 55

R Reliance, 13, 16, 37, 38, 73, 74, 106, 107, 109, 111, 117, 182, 186, 187, 192, 200, 203, 207, 208 Resource diplomacy, 33, 38, 41, 50 Rosneft, 129, 136, 179, 180, 182, 183, 186, 189 Russia-China-India (RCI), 16, 25, 98, 151, 152, 167, 168, 225

S Sanctions, 9, 11, 42, 45, 65, 66, 68, 70–73, 75, 79–81, 92, 93, 105, 112, 116, 117, 151, 154, 165, 172, 175, 177, 179, 180, 182, 184–187, 189, 190, 223, 225, 226, 230 Saudi Aramco, 65 Sea lane security, 127, 141–144, 224, 230, 232 South Ossetia, 94, 179, 231 Strait of Hormuz, 36, 78, 232 Strategic reservoir, 26, 207

T Techno-Economic Approach for AfricaIndia Movement (TEAM-9), 40, 53 Topography, 127, 131, 168 Turkmenistan-Afghanistan-Pakistan-India (TAPI), 16, 25, 78, 91, 93, 95, 96, 151–157, 161, 162, 166, 168, 169, 171, 173, 174, 185, 225, 230, 231

U Undersea pipeline, 151, 166, 167, 172, 230 United Nations Convention for the Law of the Sea (UNCLOS), 132, 133, 139– 141, 144, 145, 230 United Nations Framework Convention on Climate Change (UNFCCC), 152, 232