looking to counter the growing Chinese threat in the oil and gas sector in the Southeast Asian region, India would be looking to bolster its footprints in the region as it is looking to actively participate in Vietnam's oil and gas fields - which are to be put up for bidding before the end of the current fiscal - and the issue is likely to come up for discussion during next month's visit of Hanoi's ruling Communist Party General Secretary Nguyen Phu Trong.
Vietnam, which has not offered its oil and gas blocks for global auction since quite some time, is going to do so soon (during the current fiscal itself, it is indicated) and during Trong's scheduled visit to India in November, the senior leader who is counted among the top key functionaries of the Southeast Asian nation, is likely to seek New Delhi's participation in the bids, official sources told The Pioneer.
Hanoi is quite keen on India's participation in its oil and gas reserves as according to sources, strategically it is hoping to counter China's growing pressure on it in the petroleum and gas sector. Sources added that Vietnam sees India as a major force in the Southeast Asian region which can counter China's growing clout and therefore is keen on enhancing cooperation with New Delhi in the oil and gas sector. Sources privy to the development said that state-owned explorer ONGC's overseas arm ONGC Videsh ltd (OVl) would participate in the impending bidding of Vietnam's oil and gas blocks, though it would minutely study the feasibility of the reserves on offer before doing so.
Incidentally OVl is already an active partner in three blocks situation in Vietnamese waters namely Block 06.1 (gas reserve, where OVl has been active since 1988), Block 127 and 128 (both oil blocks). In fact when the Indian entity had signed the production sharing contract (PSC) with Vietnam to explore blocks 127 and 128, it was a rare show of aggression by New Delhi as at that time China had warned India from entering into any kind of an agreement with that country, as the two blocks are situated in a controversial enclave in South China Sea where both Vietnam and China are claiming ownership.
In fact China in November 2011 had issued a demarche to India reiterating that in order to explore Blocks 127 and 128, it would require Beijing's permission. Vietnam then had taken refuge in the 1982 UN Convention on the law of the Sea to claim its sovereignty on the two blocks. With New Delhi showing new found aggression in the region, sources pointed out that India would like to rub it in (to China) by actively participating in Vietnam's global bids for its oil and gas blocks.
In fact the Government has already made its intent clear regarding taking its relations with Vietnam to the next level, by deciding to offer a $100 million credit line to it for purchasing military equipment, and this too is going to be an important agenda during Trong's November visit. Vietnam and China have been locked in a war of wits with each other over oil and gas reserves situated in South China Sea, with both the nations claiming ownership to blocks which are situated in a specific conclave in the region.
Meanwhile Vietnam, which is considered one of the major players in the oil and gas sector in Southeast Asian region, according to an analysis by the US Energy Information Administration, has boosted exploration activities, allowing greater foreign company investment and cooperation in the sector.
"Successful exploration has recently led to a substantial increase in proved crude oil reserves (in Vietnam), which grew to 4.4 billion barrels as of January 2013 from 0.6 billion barrels two years prior. Vietnam's efforts to intensify exploration and development of its offshore fields have contributed to the growth in reserves. Ongoing exploration activities could increase this figure in the future, as Vietnam's waters remain relatively under-explored. Vietnam is currently the third-largest holder of crude oil reserves in Asia, behind China and India," the analysis said.