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China And India Unite On Energy

 Chinese President Hu JintaoWith Indian Prime Minister Manmohan Singh
India’s Oil and Natural Gas Corp. (ONGC) and the China National Petroleum Corp. (CNPC) signed a Memorandum of Understanding (MoU).
The MoU is intended to strengthen existing exploration and production
(E&P) operations in Burma, Sudan, and Syria, and look ahead to
making joint bids on foreign oil and gas fields for E&P in the
future. This is the most recent development in a trend of cooperation
between India and China that has slowly emerged over the past few years.
In 2006, the two companies signed an initial pact for bilateral oil
cooperation and possible joint crude purchases, which has enabled the
ongoing joint E&P development in Burma, Syria, and Sudan. 
Yet, these
agreements have not resulted in joint bidding or policy cooperation.
The recent MoU will enable ONGC and CNCP to expand cooperation to
jointly bidding on fields and jointly investing in infrastructure
development. The pipeline across Burma from the Bay of Bengal to
Southwest China is the first of such downstream projects and may
demonstrate the maturation of Sino-Indian energy relations.
The reality of growing economic interdependence is contrary to the
protectionist impulse that runs strong in both countries. Both nations
strive to be energy independent, but in an increasingly interconnected
and globalized world, neither India nor China has the financial or
political capital to unilaterally and effectively develop energy
resources across all energy markets. As one ONGC Videsh Ltd. (OVL)
managing director D.K. Saraff said referring to the recent MoU,
“we should collaborate and bid together; there is no point in raising
prices.” Saraff was undoubtedly referencing the above market prices at
which Chinese energy companies have secured rights to developing oil
fields in the past. With the signing of the MoU, more safeguards will be
adopted to ensure that bidding will not get out of hand, and prices
will stay reasonable.
The proposed ONGC and CNPC partnership will ease exploration and
development costs by enabling both countries to jointly participate in
developing new energy resources. As two of the biggest economies in Asia
and largest energy importers, energy access and development are primary
and mutual concerns for India and China.

 Competition and high energy
prices stem from the recognition on the part of both governments that
energy availability will be a critical limiting factor for the growth of
both economies, as energy access and availability is vital to economic
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  • Very good!

    Pakistani people will soon see their last hope saying "Bye bye".

    Pakistani people are still living in the dark age with "Mr. 10%" and "Rental Raza".

    Soon they will see and pay the price of electing "Mr. 10%" and "Rental Raza" as their leader of corruption.