Sino-Indian JV to acquire oil assets overseas

Energy-hungry India and China, often fierce rivals in the race for global oil and gas supplies, have agreed to form a joint venture company for acquisition of hydrocarbon assets in Africa and Latin America.

While the November 20-23 visit to India by Chinese President Hu Jintao produced plenty of economic commitments, the concept of increased collaboration on securing energy assets was clearly missing from the official agenda.

But this did not deter Petroleum Minister Murli Deora from using his old friend Chinese Commerce Minister Bo Xilai to get a midnight audience with Ma Kai, the all powerful chairman of National Development and Reform Commission, China's top planning agency.

Sources said Deora's unscheduled meeting with Ma Kai, who looks after seven key economic portfolios, including energy, brought about the critical meeting of minds on the need for the two countries to bid together for oil assets so as to avoid a price war.

"Both countries have in-principle agreed to work out a mechanism to bid jointly for oil and gas properties in Africa and Latin America. Indian and Chinese flagship companies will pool resources together to form a special purpose vehicle or a joint venture company to scout for assets in third countries," a source said.

An agreement for the purpose is likely to be signed in Beijing next month when Deora will visit to attend a ministerial meeting of oil importing countries.

China is hosting a meeting of energy ministers of US, Japan, Korea and India on December 15.