|
Latin America has remained at the
periphery of Indian political and economic strategy, having
presented no significant challenges, received marginal Indian
migration (mainly in the Caribbean/Atlantic), and, depending on
the country, having limited or no historic or cultural connections
with India.
In this century, however, economic exchanges, particularly in the
energy sector have been significant. The South American continent,
along with Central America and the Caribbean (LAC), and their
Exclusive Economic Zones (EEZ) are rich in oil and gas, with
probable, and even proven, estimates of reserves rising every
year.
In Venezuela, whose hydrocarbon reserves, as per latest estimates
of the OPEC, at 296.5 billion barrels exceed those of Saudi
Arabia, ONGC Videsh Ltd (OVL) signed a joint venture (JV)
agreement with Venezuela's state oil company PdVSA, acquiring a 40
percent share in the San Cristobal oil field. In May 2010, three
Indian public sector companies acquired 18 percent (OVL 11
percent; Indian Oil Corporation 3.5 percent and Oil India Ltd 3.5
percent) in a JV with PdVSA, Repsol and Petronas, to exploit the
gigantic Carabobo-I heavy oilfield with estimated reserves of 27
billion barrels in place.
The total Indian investment in Venezuela so far is about $3
billion and production from all fields is expected to cross
500,000 barrels per day (bpd) by 2016, with option for our
companies to transfer up to 70,000 bpd to India, over a licence
term of 25 years, extendable by a further 15 years.
In Brazil´s rich offshore basin, OVL has obtained four
concessions, envisaging investment commitments exceeding $1
billion. Indian companies BPCL and Videocon in consortium acquired
a 40 percent share in 10 offshore Brazilian blocks in September
2008.
In Colombia, in consortium with China's Sinopec, OVL acquired a 50
percent share in Mansarovar Energy Colombia Ltd (MECL) which
operates a cluster of oilfields in central Colombia producing over
30,000 bpd, along with a 189-km pipeline.
In September 2007, OVL acquired 40 percent and 50 percent shares
in three offshore gas fields and in December 2008, it acquired 50
percent and 100 percent respectively in two blocks in eastern
Colombia. OVL's overall investment till date in Colombia amounts
to over $600 million.
In December 2007, Reliance Industries Limited was awarded two
blocks off the Colombian Pacific coast. Another Indian company,
Assam Oil, set up an office in Colombia in 2010.
In Cuba, OVL acquired a 30 percent share, in consortium with
Repsol and Petronas, in seven deep water exploration blocks spread
over almost 12,000 sq. km. in May 2006 in Cuba's EEZ with
estimated reserves in excess of four billion barrels. In September
2006, OVL entered into a production sharing contract with CUPET,
Cuba's state oil company, for two offshore blocks. Investment by
OVL in Cuba till mid 2011 was over $70 million. Cuba is estimated
to have between five billion and 20 billion barrels of oil
reserves offshore.
In Trinidad and Tobago (T&T), Gas Authority of India Ltd. (GAIL)
is actively negotiating a $1 billion investment with NGL for the
supply of liquefied natural gas. In 2011 Reliance signed an MOU
with T&T for a plant to make synthetic crude from hydrocarbon
residue which will be used by Reliance in India to make bitumen.
Reliance is understood to have acquired four hydrocarbon blocks in
Peru. Jindal, another Indian conglomerate, has also been granted
concessions in Peru, while it has discovered gas in southern
Bolivia, where it is exploiting large iron ore deposits. In
Argentina, OVL has signed an MOU with ENARSA for possible oil
exploration.
Energy security earlier focussed on the possibility of concluding
term contracts at fixed, reasonable rates, a prospect that appears
increasingly difficult now, given the recent and foreseeable
volatility in crude prices. Today, the focus is on participation
in exploration and exploitation. OVL has secured billions of
barrels of reserves which it can safely exploit over the next
decades, while other state and private Indian companies are
following its example.
Reliance has been importing oil from Brazil from 2000 in exchange
for supplying diesel, accounting for over 40 percent of bilateral
trade between India and Brazil over the past decade. Combined with
a lesser volume purchased by Essar, total crude purchases by India
from Venezuela in 2010 amounted to $5.167 billion.
Another dimension of India's energy partnership with Latin America
lies in alternative fuels. Although collaboration in solar, wind
and nuclear energy (supply of uranium) is yet to come on the
drawing board, joint ventures and even import of ethanol and
bio-diesel from Brazil, including transfer of technology, are a
reality. India has donated solar energy panels to a few LACs in
the past years. The considerable landmass available in Latin
America for cultivation of sugarcane, jatropha and other sources
of alternative fuels offers exciting possibilities in the future.
Latin America is also a rich source of coal. Several private
Indian companies are examining the economics of shipping coal to
India and the assurance of supply has to be worked out before this
sector can be added to hydrocarbons as an area of significant
interest, though there have been some shipments of thermal coal to
India from Colombia.
Deepak Bhojwani has served as India's ambassador to
Venezuela, Colombia and Cuba among other postings in Latin
America. He can be contacted at deepakbhojwani@hotmail.com
|
Comments
|
Quick links