India back in line

Driven by energy, India is going all out to win Iran as it is redefining its foreign policy strategy. A reset that can irk Washington but signals New Delhi's changing foreign policy imperative, Indian diplomacy is working hard to protect its oil and gas interests in Iran - one of the largest producer of gas and second-largest supplier of crude oil to India after China. Worried over losing two gas-rich blocks in Iran - Farsi and South Pars 12, where ONGC Videsh Ltd (OVL) has equity stakes -New Delhi as part of its diplomatic efforts has asked the Indian petroleum ministry to send "a team from OVL to visit Iran for talks and keep them engaged, so that there is no risk of Farsi block being cancelled or diverted". "In the past, they (Iranian authorities) have threatened cancellation of the block in case delay continues indefinitely," according to a note for internal circulation of the Indian petroleum ministry. "Iran cancelled LNG deal with India after one such vote," the note said, adding, "the challenge of the Indian diplomacy is to isolate adverse fallout of Indian vote against Iran in the IAEA/UN on Indian interest in having access to Afghanistan and Iranian crude." The two gas blocks in Iran hold thrice as much the gas reserves as India's largest gas field, the KG-D6 field of Reliance Industries Ltd. Also riding high on the changed scenario is a set of geopolitical factors - from Afghanistan to Pakistan on issues ranging from trade and transit to central Asia and beyond. "Fresh efforts are on to see that India's interests in the two massive gas blocks in Iran-the Farsi and South Pars 12 - are kept protected and that the blocks do not face any cancellation," a ministry of external affairs official said. "Iran is a factor of stability in the region," the official said. "Iran does have a big role in our energy security plans." India imports 18 million tons of crude oil per annum from Iran and according to petroleum ministry, there is no alternate source which can supply such large volume of crude oil given the tight position in world market. The South Pars Phase 12 block also has huge reserves and OVL has been offered a 40% stake in this block. OVL has been joined by Hindujas for the exploitation of this block, although their respective shares remain to be worked out.