Oil manoeuvres by China, India, challenge US

Press Trust of India/APPosted online: Wednesday, July 20, 2005 at 1202 hours ISTVienna, July 20:

Iran, Sudan, Venezuela, Syria - nations shunned by America as nuclear threats, insurgent havens or human rights violators are increasingly being wooed by China and India in a race for oil and influence that is challenging Washington on the energy and security fronts.

The most recent US concerns have focused on China's bid for Unocal Corp, America's ninth largest oil company. American congressmen, senators and former CIA director James Woolsey have described it as a threat to US National security.

But less high-profile manoeuvres by the two Asian powerhouses also are raising questions.
Besides their involvement in energy projects worth billions of dollars in countries America views with concern, India and China also have bought into Russia's oil and gas sector. And Beijing, with Moscow's apparent blessing, is reaching out to energy-rich former Soviet republics in central Asia where the Americans have military outposts.

The all-out energy offensive by the two Asian powers was documented this year by the national intelligence council, the US government think thank which advises the central intelligence agency and senior US policy-makers.

Strategic manoeuvring has always been a part of world rivalries and most nations aren't that choosy, Saudi Arabia, the world's largest oil producer, remains crucial to Washington despite its human rights record. But the imperative of making friends with energy-rich nations has grown over the past two years as oil prices rise and consumption grows.

Most of the oil still is pumped by the Organisation of Petroleum Exporting Countries, based in Vienna, Austria, whose powerhouse is Saudi Arabia.

"These countries are a magnet for oil-hungry countries," says Michael Klare, author of Blood and oil: The dangers and consequences of America's growing petroleum dependency.

India's oil consumption over the same period is expected to double to a daily 5.3 million barrels - also mostly imported.

"Right now, they get most of their oil from the ... Gulf countries but they are fearful that if the US closes the Straits of Hormuz, then China would be starved of oil."

Beijing is also casting a wider oil net because the US presence in Iraq -thought to have the world's second-largest oil reserves - has derailed Chinese attempts to establish a toehold there.
Chinese and Indian investments in countries and regions of US concern include India's multi billion dollar project to pipe in Iranian gas via Pakistan - a plan criticised this month by US Secretary of State Condoleezza Rice; billion-dollar investments by India's main oil and gas enterprise in far-flung projects that include Syria - accused by Washington of failing to prevent insurgents from crossing its border into Iraq and of suppressing democracy in Lebanon. India has also signed a pipeline deal with gas-rich Myanmar's hard-line military junta.

Chinese and Indian interest in Venezuela, the fourth largest US oil supplier, whose President, Hugo Chavez, is a fierce critic of US foreign policy. Chavez is trying to rewrite concessions to US oil companies and has invited China and India to participate in oil exploration.

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