When the redoubtable Mani Shankar Aiyar donned the cap of the petroleum minister, he didn't quite anticipate he'd have to pull out his discarded diplomat's hat. But it appears Aiyar has had to draw on his Foreign Service experience to help India's multi-billion dollar quest for equity oil acreages abroad. As the cash-rich ONGC subsidiary, ONGC Videsh Ltd. (OVL), vigorously scouts for oil properties across the globe, Aiyar's modest Shastri Bhavan office has become the second port of call, after South Block, for many a diplomat and visiting foreign dignitary.
Today, oil diplomacy is at the cornerstone of India's foreign policy interface, in large tracks of Africa, Latin America, East Europe and West & South East Asia. The phlegmatic, clich-ridden diplomatic dialogue of the past has now given way to hard, behind-the-scene maneuvering -- with
governments in countries as far-flung as Ecuador, Cuba, Sudan, Angola, Russia, Kazakhstan, Libya, Iran and Ivory Coast.The minister, no doubt, faces formidable challenges in his quest: Not just in identifying the right oil block to acquire but, increasingly, in keeping the competition -- particularly the belligerent Chinese -- at bay while negotiating and clinching a deal. Aiyar has fit into the role of India's petroleum minister with natural ease, particularly when he deals with governments around the world. Just last month in Vienna, he delivered a keynote address at an exclusive OPEC summit, where he rubbed shoulders with 13 key OPEC ministers. The visit culminated in a dinner hosted in his honour by the Saudi crown prince Abdullah who, incidentally, is learnt to have graciously shared a vegetarian meal with the Tam Bhram.
Aiyar is now busy hammering together a buyer's cartel -- to be comprised of Asian heavyweights such as China, Korea and Japan. The intent of this cartel will be to pressurise the West Asian oil suppliers to remove what is dubbed as an "Asian Premium" on crude prices. This week, the minister is in Russia frenetically lobbying with the Kremlin, to buy up cash-strapped Russian oil and gas companies and oil fields. However, Aiyar's intense diplomatic footwork in the past few months is yet to show concrete results; there has been not a single equity oil deal struck so far.
His efforts may be valiant, but his speeches still reflect traces of a third-world naivet: At the inaugural address at the Fourth All-Russia Oil and Gas Week on Tuesday, he dismissed the oil price hike rather simplistically as "a speculative bubble which will burst one day" -- any observer would acknowledge that the movement of oil prices is governed by a far more complex mechanism. Besides, it often takes more that just diplomacy, and rhetoric, to cut ice with the cynical, hard-nosed equity oil seller -- diplomacy, at best, can be a tool towards a more complicated end, and not an end in itself.
Not quite a master in the subject as yet, Aiyar appears to be very much on the learning curve. And this results in him being misled on occasion: Recently, the Angolan petroleum minister promised to approve an OVL bid to buy 50% of an Angolan deepwater block, only to return home and wrap up the deal with a Chinese company.
Aiyar may have distinguished himself at a job he knows well -- diplomacy. He now needs to get savvy and excel in the undiplomatic business of sharp negotiation and, ultimately, pocketing that all-elusive oil deal. That, as petroleum minister, will be his Big Deal!
Today, oil diplomacy is at the cornerstone of India's foreign policy interface, in large tracks of Africa, Latin America, East Europe and West & South East Asia. The phlegmatic, clich-ridden diplomatic dialogue of the past has now given way to hard, behind-the-scene maneuvering -- with
governments in countries as far-flung as Ecuador, Cuba, Sudan, Angola, Russia, Kazakhstan, Libya, Iran and Ivory Coast.The minister, no doubt, faces formidable challenges in his quest: Not just in identifying the right oil block to acquire but, increasingly, in keeping the competition -- particularly the belligerent Chinese -- at bay while negotiating and clinching a deal. Aiyar has fit into the role of India's petroleum minister with natural ease, particularly when he deals with governments around the world. Just last month in Vienna, he delivered a keynote address at an exclusive OPEC summit, where he rubbed shoulders with 13 key OPEC ministers. The visit culminated in a dinner hosted in his honour by the Saudi crown prince Abdullah who, incidentally, is learnt to have graciously shared a vegetarian meal with the Tam Bhram.
Aiyar is now busy hammering together a buyer's cartel -- to be comprised of Asian heavyweights such as China, Korea and Japan. The intent of this cartel will be to pressurise the West Asian oil suppliers to remove what is dubbed as an "Asian Premium" on crude prices. This week, the minister is in Russia frenetically lobbying with the Kremlin, to buy up cash-strapped Russian oil and gas companies and oil fields. However, Aiyar's intense diplomatic footwork in the past few months is yet to show concrete results; there has been not a single equity oil deal struck so far.His efforts may be valiant, but his speeches still reflect traces of a third-world naivet: At the inaugural address at the Fourth All-Russia Oil and Gas Week on Tuesday, he dismissed the oil price hike rather simplistically as "a speculative bubble which will burst one day" -- any observer would acknowledge that the movement of oil prices is governed by a far more complex mechanism. Besides, it often takes more that just diplomacy, and rhetoric, to cut ice with the cynical, hard-nosed equity oil seller -- diplomacy, at best, can be a tool towards a more complicated end, and not an end in itself.
Not quite a master in the subject as yet, Aiyar appears to be very much on the learning curve. And this results in him being misled on occasion: Recently, the Angolan petroleum minister promised to approve an OVL bid to buy 50% of an Angolan deepwater block, only to return home and wrap up the deal with a Chinese company.
Aiyar may have distinguished himself at a job he knows well -- diplomacy. He now needs to get savvy and excel in the undiplomatic business of sharp negotiation and, ultimately, pocketing that all-elusive oil deal. That, as petroleum minister, will be his Big Deal!
Via: IndianPetro
By Santanu Saikia
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