Millennium Post

Indian Oil Rush in Mozambique

Indian Oil Rush in Mozambique
Africa and India are rising together, firmly holding hands as they emerge to fulfil their aspirations and exchange their resources and knowledge for each other’s mutual advancement.

The Africa – India summit, scheduled for December 2014, has been postponed to 2015, where for the first time the invitation has been extended to all African states. They will be keen to share in New Delhi's foreign policy of encouraging Indian investment abroad. Last month in Delhi, External Affairs Minister Sushma Swaraj and her Mozambique counterpart held comprehensive talks reviewing multiple aspects of their bilateral relationship. India is currently a top five trade partner in Mozambique. 

New Delhi is looking to nurture this relationship and become a catalyst in Mozambique's extraordinary growth story. Discussions covered investment, trade, knowledge transfer and enhanced cooperation, especially within the oil and gas sector and the Ebola situation. A five-year Memorandum of Understanding was signed between Indian Petroleum Minister Dharmendra Pradhan and Mozambique’s Minister of Foreign Affairs Oldemiro Baloi, regarding cooperation in the oil and gas sector.

India’s energy requirements are currently met by a combination of domestic coal, which serves at approximately 70% and oil at 30%. The majority of our crude oil requirements are met by imports. India is the world’s fourth largest consumer of oil, and interestingly up until 2005, India did not import any oil from African countries. However, in an attempt to diversify and reduce its dependence on supplies from the Gulf, India looked towards Africa through trade and investment. Today in 2014, it imports greater than 20% of its oil demand from Africa. Recently ONGC, the Indian-government backed energy organisation, has bought a 10% stake in the offshore gas field Anadarko Petroleum Corp in Mozambique. 

Mozambique gained independence from Portugal in 1975 after four centuries of colonial rule, and within two years of its new found freedom it broke out into an intense civil war, which ended in 1992. Since 1994, the country has emerged as a democratic and politically stable republic. Currently it is undergoing a period of extraordinary growth in Sub-Saharan region, and India could play a role not only in its economic development but also in sharing knowledge and experience on development issues and improved health and educational outcomes, such as improved literacy.

As India augments the process of capacity building in the oil and gas sector, it could take a leadership position to ensure that wealth is equitably distributed and Africa’s natural resources remain a blessing. Historically African resources have been a curse as foreign countries sought to exploit as oppose to exchange. Going forward together, both Africa and India could work to create an equitable distribution of wealth, reduction in inequality, transparent democratic institutions and a prosperous people, walking hand in hand.

Anuj Agarwal

Anuj Agarwal

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