China and India form power block
as oil production nears peak, prices set to rocket | 13.01.2006 18:00 | Analysis | Globalisation | London | World
Today we consume around 4 times as much oil as we discover. Approximately half of all know oil reserves have already been recovered, and oil production will peak in the near future, or perhaps already has. Demand for oil by the world growing economies will soon outstrip supply.
Oil prices will continue to rise, as will the cost of transportation, industrial production, consumer goods, and food...
Oil prices will continue to rise, as will the cost of transportation, industrial production, consumer goods, and food...
[Note: If you are concerned about the increasing world conflict over dwindling cheap oil, you might be interested in a gathering about the implications of peak oil planed to take place at the rampART social centre in February. Email rampartATmutualaidDOTorg is you would like to find out more or offer help organising the event.]
Power Pact - India and China form oil co-op
The world's two fastest growing energy consumers, India and China have set aside long-standing rivalries and agreed to co-operate in securing access to overseas oil resources. They hope to prevent pushing up prices by competing for oil supplies.
The announcement coincided with increasing concern over threats to world oil supplies as a result of possible sanctions on Iran. Prices rose above $US65 ($86) a barrel on the New York Mercantile Exchange.
The Sino-Indian agreement was signed in Beijing by Indian Petroleum Minister Mani Shankar Aiyar and Chinese Minister for National Reform and Development Commission Ma Kai. The agreement comes after India's Oil and Natural Gas Corp lost out to Chinese rivals in the race to acquire fields in Angola, Nigeria, Kazakhstan and Ecuador. But a recent joint purchase of a stake in a Syrian oilfield by ONGC and the China National Petroleum Corp could set a pattern for future deals.
Mr Aiyar hailed this as a model. Oil executives said co-operation between China and India could benefit international energy companies by reducing the ferocity of the bidding. Under the agreement, Chinese and Indian oil companies will establish a formal procedure to exchange information about a possible bid target, before agreeing to co-operate formally.
Sceptics say Chinese companies are unlikely to share their real business plans with Indian rivals, especially as they have mostly been able to outbid them.
"Governments like to sign pieces of paper, but it often doesn't amount to much," one analyst said. India is more dependent on oil imports than China. India's import dependency will increase from 70 per cent of consumption this year to about 85 per cent in 15 years.
China imports about half its oil. Foreign Minister Li Zhaxing this week started a trip to Africa that will underpin Beijing's search for energy security.
Power Pact - India and China form oil co-op
The world's two fastest growing energy consumers, India and China have set aside long-standing rivalries and agreed to co-operate in securing access to overseas oil resources. They hope to prevent pushing up prices by competing for oil supplies.
The announcement coincided with increasing concern over threats to world oil supplies as a result of possible sanctions on Iran. Prices rose above $US65 ($86) a barrel on the New York Mercantile Exchange.
The Sino-Indian agreement was signed in Beijing by Indian Petroleum Minister Mani Shankar Aiyar and Chinese Minister for National Reform and Development Commission Ma Kai. The agreement comes after India's Oil and Natural Gas Corp lost out to Chinese rivals in the race to acquire fields in Angola, Nigeria, Kazakhstan and Ecuador. But a recent joint purchase of a stake in a Syrian oilfield by ONGC and the China National Petroleum Corp could set a pattern for future deals.
Mr Aiyar hailed this as a model. Oil executives said co-operation between China and India could benefit international energy companies by reducing the ferocity of the bidding. Under the agreement, Chinese and Indian oil companies will establish a formal procedure to exchange information about a possible bid target, before agreeing to co-operate formally.
Sceptics say Chinese companies are unlikely to share their real business plans with Indian rivals, especially as they have mostly been able to outbid them.
"Governments like to sign pieces of paper, but it often doesn't amount to much," one analyst said. India is more dependent on oil imports than China. India's import dependency will increase from 70 per cent of consumption this year to about 85 per cent in 15 years.
China imports about half its oil. Foreign Minister Li Zhaxing this week started a trip to Africa that will underpin Beijing's search for energy security.
as oil production nears peak, prices set to rocket