NEW DELHI: India's failure to win control of PetroKazakhstan, the Canadian oil company with all its operations in the Central Asian state, marked a low point for Mani Shankar Aiyar. It did, however, confirm India's petroleum minister's belief that Asia's two emerging economic giants should co-operate rather than compete as they go about securing energy supplies for their fast-growing economies. Although India and China enjoy better relations than in the past, many liken their competition for energy and influence in the region to the 19th-century "Great Game" between Britain and Russia. It is a comparison Mr Aiyar loathes. "China is not an imperial power and nor are we," he says. "The great game led to a war to end all wars and set the stage for round two, in which millions of people died." Next month, Mr Aiyar will lead an Indian delegation to Beijing to discuss the lessons of the PetroKazakhstan debacle. China secured control of the New York-listed company after a bidding war with India's Oil and Natural Gas Corporation (ONGC) and its partner, L.N. Mittal. This saw the Canadian company's shares double in value over the summer and both sides disgorging large sums to lawyers and investment bankers. "I don't think the future lies in rivalry at all," he says. "I think the PetroKazakhstan instance alone shows that when China and India pit themselves one against the other, it may be China who wins or it may be India who wins, but the guy who goes running to the bank with a huge smile on his face is somebody who's made $600m out of nothing but counter-bidding between the only two possible buyers." During his visit, Mr Aiyar aims to sign an agreement governing competition for hydrocarbon reserves between Chinese and Indian companies. Such a deal, he believes, would radically alter the balance of power between the owners of oil and gas assets and the two Asian economies, which have been moving markets against themselves as they battle for energy. "Essentially it would set up an institutional framework within which companies of the two countries could inform each other in time of where their interests lie and then try to harmonise these positions," Mr Aiyar says. "The market will, of course, dictate competition on occasion, but the number of occasions on which we can go in shoulder to shoulder might be very considerable." Few expect that Chinese companies will share their real business plans with their Indian rivals, and Mr Aiyar's enthusiasm for the scheme betrays an idealism that his critics say is actually counterproductive meddling. The chairman of the ONGC, Subir Raha, recently lashed out at Mr Aiyar for not knowing the difference between a publicly listed company with obligations to its shareholders and a government department. Despite suffering a sprained ankle over the summer that has left him with an awkward limp, Mr Aiyar has emerged as one of the most vigorous and energetic ministers in the Congress-led government. His intellectual self-confidence, love of rhetorical flourishes and determination to secure Indian access to oil and gas have given the Cambridge graduate a profile enjoyed by no previous Indian petroleum minister. A close friend of the late prime minister Rajiv Gandhi, and a former diplomat, Mr Aiyar has appeared in recent months to be running a parallel foreign policy, particularly with respect to Iran. Two of his biggest projects both involve Iran -- a pipeline via Pakistan and a $25bn liquefied natural gas import contract -- and have suffered from India's decision to support the EU-3 resolution on Tehran's nuclear programme. Another FT Syndication Service report by Carola Hoyos from London, Jo Johnson from New Delhi, Khozem Merchant from Mumbai and Sheila McNulty from Houston adds: Three of the world's biggest energy companies are competing for a stake in a giant natural gas field discovered by Reliance industries in the deep waters of India's Bay of Bengal. UK-based BP and Chevron and ExxonMobil of the US are in talks with Reliance Industries, India's largest private sector exploration company, for an interest in a field in the Krishna Godavari basin. Lord Browne, BP's chief executive, held talks with Mukesh Ambani, chairman of Reliance Industries, during a recent visit to India to sign an agreement to help Hindustan Petroleum build a $3.0bn refinery in the Punjab. The meeting was followed by further talks between senior executives of the two companies. Lord Browne's visit was a "push" towards arriving at a final position, said an Indian executive familiar with the discussions. The executive, who also confirmed the interest of the other oil majors, said Reliance Industries was still considering its options. Lord Browne told the Financial Times in New Delhi: "We need to do more [in India]. We are looking at various options in exploration and production, as well as more in refining and marketing." Asked if BP was interested in a stake in the Reliance field, he said: "We've certainly registered it. It's an important set of discoveries in a world class basin. It would be good if BP were represented there." Hurdles remain; India's main consuming areas are in its west and north, whilst the new field is in the south-east. No adequate pipeline exists although one is part of the development plan.
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