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Alok asked: What are the strategic and commercial implications of the MoU between ONGC and CNPC, and the future potential of India-China cooperation in the energy sector?

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  • Jagannath P. Panda replies: The current China-India multilateral politics shapes the auxiliary evolution of regional vis-à-vis global political relations, standing as both cause and effect in their relationship course. One variable that shapes the China-India bilateral relationship is “resource politics”, mainly energy- be it gas or oil- or even the economic richness of a region. No matter how resonant economically China or India individually are, the current facets of both regional and global politics suggest that there is always potential for interstate contention for resources. In the case of China and India, the strategic quest for energy security in Asia and beyond has influenced their foreign policy construct and design. Both are trying to explore new modes and mediums for cooperation and competition in the field of energy resource. Therefore, the future of India-China cooperation in the field of energy will largely depend upon their foreign policy contours and related power politics.

    The recent MoU between the ONGC and CNPC to jointly explore oil and gas is certainly a welcome step in Sino-Indian Relations. It points towards the cooperative drive between China and India on various micro-economic issues linked to their developmental discourse. In fact, both the ONGC and CNPC have worked closely on previous occasions in Sudan, Syria and Myanmar. In most of these places, the CNPC was the leading partner of the ONGC (Videsh), and the latter seems to have gathered more experience in joint oil explorations after working with a competitive body like the CNPC. However, the ONGC has also lost few competitive bids to the CNPC previously. Besides, the CNPC is a much wealthier and an influential oil exploring company at the global level. It would always like to have its own space and autonomy, even though it has shown interest in conducting joint explorations with non-Chinese companies. Hence, the ONGC must be vigilant about the activities of the CNPC while carrying out any joint exploration projects, since the Chinese government heavily backs the agenda and activities of the CNPC.