Thursday, July 06, 2006
Energy: Geopolitical shifts
The Frontline has a piece on the Shanghai Cooperation Organization which has been described by a western academic as "OPEC with the bomb". The imporance of India's low key presence as an observer country can be interpreted as either making up for the current shift towards the US with its Asian partners or as a fifth column for US interests. Given the fact that the Petroleum minister Deora attended instead of Head of state Dr.Singh, the latter sounds plausible. Especially as Deora is seen to be close to US interests. However it could be a bit of both as India has stated its intent in joining this grouping. Being part of the SCO with Russia and China is very important for India's energy security and the importance of this cannot be overstated. It must be remembered that Deora is a new hand at the ministry who was brought in to appease (my opinion) the US as Mani shankar iyer did the unthinkable by actually cutting a strategic deal with the chinese to cooperate instead of compete on equity oil. It is my concidered opinion that Dr.Singh had to lose Mani to show that India is serious about the Nuclear deal. The joint agreement is now a dead letter. While the US can scare India or for that matter anyone else away from equity oil, china is a different kettle of fish when it comes to intimidation.
The prize at stake here is the central asian oil reserve that is being eyed by both the SCO (including observers :) and the US as the strategic reserve of the 21st century. Iran and Pakistan (also observer nations) are lobbying hard to get into this grouping. With Iran in the fold this could be the biggest emerging cartel and have major ramifications on how central asian oil will be exploited and for whose benefit.
If Iran, Pakistan and India join this grouping (as they should) the SCO will provide the foundation for an Asian Energy Framework, that will compete head on with the west for oil reserves. With Venezuela and the South American block already showing interest in selling equity oil to India and China, a Mercosur-SCO + IPI block will change the energy map of the world. Watch this space for lots of action.
Some more voices on the same issue.
Very Strange issues