The Times of India: Diplomacy at work to save Angola oil deal: “Sonangol exercised its first right of refusal with Shell, pre-empting its bid to sell its 50 per cent of the 10-million-tonne per annum offshore Block 18 to ONGC.” (ShellNews.net)
INDRANI BAGCHI AND SANJAY DUTTA
Posted 20 Oct 04
NEW DELHI: India is pulling out all diplomatic stops to get a renewed shot at an Angolan offshore oilfield. Angola has blocked India's 50 per cent equity participation in production of Block 18 that could have given India five million tonnes of crude oil from 2008.
The foreign office and ONGC Videsh are currently working out a "customised" political economic package for Angola that could sweeten the deal and outbid China's offer. Angola has said that it might entertain India's offer after Shell was out of the picture.
Suspicions here that the Angolan oil company, Sonangol, might tilt towards China because of a $2-billion aid package by Beijing are also overstated, sources said, because Angola is aware that India would construe such a move as an "unfriendly act".
Sonangol exercised its first right of refusal with Shell, pre-empting its bid to sell its 50 per cent of the 10-million-tonne per annum offshore Block 18 to ONGC. Angolan petroleum minister Desiderio da Graca Verissimo e Costa had assured oil minister Mani Shankar Aiyar at Vienna to consider India's request after using the pre-emption right. However, after returning to Luanda, he went back on his word to say that India should "forget" the Block 18 oilfield and wait for other opportunities.
For the present, Sonangol is likely to continue to hold on to the equity, while weighing the pros and cons of an Indian presence. India is working out a more attractive incentive package for Angola and Sonangol. Earlier, India had indicated that it would give development assistance of $20 million spread over two years, manpower training and a railway rehabilitation project. But this was outweighed by China's much more attractive offer. India is having to rethink a lot of its traditional ways of aid and assistance, like training, technology, or even harping on old political relationships with countries, which just do not do the trick any more.