India’s quest for energy security and its oil diplomacy efforts suffered a serious setback, with Iran not only opting for China for the development of the South Azadegan oilfield, but also trimming India’s share in the Phase-12 of the South Pars gas field in the Persian Gulf.

With India already trailing China in its quest for global hydrocarbon resources in major African nations, the recent setback has further added to the worries of the Petroleum and Natural Gas Ministry, which is likely to take damage-control measures.

Minister Murli Deora has announced his intention to meet Iranian leaders in Beijing during the Shanghai Cooperation Organisation (SCO) meeting on October 13. Mr. Deora is leading the Indian delegation. The Minister has come under fire for doing little to save the situation, and his Ministry for virtually sitting on various initiatives to secure oil and gas assets abroad.

Although Iran has not gone on record about its decision to opt for China National Petroleum Company (CNPC) instead of the ONGC-Hinduja joint venture, it is clear that the Persian Gulf country has not taken kindly to the “indecision” on the part of the United Progressive Alliance government on the India-Pakistan-Iran (IPI) pipeline.

Both Iran and Pakistan have already gone ahead with the agreement and Iran has indicated that if India does not respond soon, it could opt for China as the third partner.

Although there is no set agenda for the meeting with Iranian Vice-President Mohammad Reza Rahimi, officials said all issues, including the IPI pipeline, would come up for discussion. Last year, Iran had identified the South Azadegan oilfield and South Pars Phase-12 gas field for the state-owned ONGC and Hinduja combine, but in the 21 months since virtually no progress has been made.

Last week, Iran signed a deal to give the 260,000 barrels a day South Azadegan oilfield along the Iraqi border to China’s CNPC. It has now given one-third out of the promised 60 per cent stake in $7.5 billion South Pars-12 to Angola’s state-owned oil firm Sonangol. The situation is no different with Russia, where India is being made to sweat it out to secure a stake in the Sakhalin III oilfields.

Mr. Deora said he was also looking forward to an early meeting with Iran Oil Minister Masoud Mirkazemi.

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