Indian Defence Review

India’s Energy Stakes in Africa

Africa has become a major attraction for Indian oil companies in recent years. Currently, around 24 percent of India’s crude oil imports come from sub-Saharan Africa, mainly from Nigeria. Importantly, China and US too draw heavily from there. India has invested in Sudan, Angola (so too has China), Ivory Coast (presently under turmoil) and Ghana. Countries like Chad, Niger, Republic of Congo, Gabon are also of immense significance in terms of their energy potential and the Indian Government and its oil companies are trying to get a foothold there. But these countries are also getting the attention of China.

“¦the US as the leading economic power has a strong interest in maintaining Chinese integration into global markets including oil markets as long as they adhere to international rules.

The discovery of vast energy sources in sub-Saharan Africa which holds seven percent of the World’s oil reserves and has an 11 percent share of current production, has raised the strategic importance of the African continent. It is estimated that sub-Saharan African governments will receive US$ 200 bn in oil revenues over the next decade. Major world powers like the US and China are scrambling to stake out their oil claims. This scramble will lead to great instability in the continent in the years to come. Additionally, oil wealth has brought with it the perils of conflict and rise of ‘authoritanism’ in these countries.

Incidentally, Oil has been the reason for prolonging, if not starting the conflict in Sudan, Nigeria and Angola. This scramble for Africa can lead to greater militarization of the continent as major powers pour in military assistance and weapons to protect their energy supplies. Both the US and China are preparing accordingly. The US has recently raised its Africa Command with an eye towards the potential conflict that may emerge out of this scramble for oil. Considering India’s growing energy needs and the requirement to diversify oil imports to prevent oil from becoming a strategic weakness, India not only needs to sharpen its diplomatic skills but increasingly factor in, the movement of Chinese battle ships in the IOR and the Gulf of Aden.

Only a fortnight ago, Chinese battle ships for the first time, made a port call in the Gulf of Aden. Thus, it is not only oil and piracy in the Gulf of Aden but the spectre of Chinese military presence which will require India’s undivided attention in the years to come. India must watch its step carefully to ensure that it competes viably with China and continues to ensure that every successive contract that China laps up does not leave it without one. After all, India has its own industry and growth to feed. Does the World and Africa have enough for both? Can one exclude the other? Let the future unfold. India has to compete with China in Africa not only for its oil but also for its markets to buy Indian goods. Will competition be on the basis of mutual cooperation and adjustment or exclusion, only time will tell.