Union Minister for Petroleum and Natural Gas Mani Shankar Aiyar who is in Beijing to forge a strategic tie-up with China in the hydrocarbons sector, said on Friday that "aggressive" bidding between the two Asian giants in acquiring foreign assets have cost Beijing billions of extra dollars.
Since both India and China are net energy importing nations, it is hardly surprising that almost everywhere in the world that an Indian goes in quest of energy, chances are that he will run into a Chinese engaged in the same hunt, Aiyar said.
"The Chinese hunter has been rather more successful than the Indian on several occasions in the recent past," he said recalling successful bids by Chinese oil giants over their Indian counterparts in countries like Kazakhstan.
"But the fact is that aggressive bidding by either party only pushes up the price of the asset to the advantage of the seller and the disadvantage of both bidders," he said emphasising that India does not view China as a strategic competitor but as a strategic partner.
"In the end, whether the winner is China or India, the buyer ends up paying more - and sometimes substantially more - than might have been the case if bidding against each other had been replaced, or at least moderated, by prior consultation," he said.
In the last two years, owing to aggressive India-China competition, Beijing has ended up paying several hundred million dollars and possibly well over a billion dollars more to the seller than it would have paid as a result of aggressive bidding against each other, Aiyar said.
Stating this during a question and answer session after delivering a speech on 'India and China in Asia's Quest for Energy Security,' Aiyar said, "In these circumstances, it just makes good commercial sense for us to exchange information well in advance about overseas assets so that we can take decisions well on time.
Aiyar, during his over two-hour meeting with the chairman of the National Development Reform Commission, Ma Kai in Beijing on Thursday, emphasised that it would be better for Indian and Chinese companies to engage in "unbridled rivalry" for the acquisition of overseas assets.
"Of course, the market will sometimes dictate that our companies submit competing bids. But if there is sufficient exchange of information well in advance and well on time, combined with mutual trust and confidence, there would perhaps be many more occasions when India and China could work together to the mutual advantage of both partners," the minister said.
Aiyar said it is in search of such mutual cooperation to the mutual benefit of the two countries that he has come to Beijing.
He said the MoU signed on Thursday between the two governments on cooperation between the two sides on the hydrocarbon sector has laid a "historic foundation for the all-round development of energy cooperation among our two great countries."
Apart from the government-to-government MoU, Indian and Chinese oil and gas companies have also signed four other MoUs for future cooperation while the research institutions of the two countries have also signed another MoU to establish cooperation.
