With distrust growing between both nations, India plans to restrict Chinese firms from participating in the next offer of oil and gas exploration blocks — especially those at the borders and near strategic installations.
Of the 68 blocks proposed by the petroleum ministry for inclusion in the 10th auction round, the Ministry of Home Affairs has identified 53 locations where Chinese presence — including machines purchase, sub-contracts or consultancy — would not be allowed.
“China is already involved in developing various projects in Pakistan including those located close to India-Pakistan border. Hence, it is advisable that Chinese companies are not given contract for exploration activities in such blocks, and also in blocks close to sensitive defence installations, strategic assets and in Northeast,” says the November 25 advisory from the ministry.
“It would be pertinent to mention here that these restrictions may be observed in respect of sub-contracts, leasing the work, consultancy, procurement of equipment and utilising services for repair and maintenance of the equipment too,” it adds.
Economic relations between both countries has deteriorated following the intrusion by a platoon of the People’s Liberation Army into Indian territory in the Daulat Beg Oldie area of eastern Ladakh last April and their camping in tents there for nearly three weeks.
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The resulting standoff and Beijing’s increasing involvement with India’s immediate neighbours has revived New Delhi’s distrust in China.
Among the blocks that would be kept off-limits for Chinese firms, 24 are in border areas of Gujarat-Kutch and Cambay basin where the home ministry also feels adequate security would be required to fend possible attack by the Lashkar-e-Taiba (LeT).
“As per inputs, LeT has raised its maritime wing and has reportedly given deep-water training to its cadres, off Karachi coast. Ability of the LeT to strike selected targets with utmost precision through sea route was demonstrated during the 26/11 Mumbai terror attacks. Therefore, adequate security arrangements have to be made for guarding all these exploration sites against terrorist attacks from Pak waters’ side,” it cautions.
Two blocks each in Rajasthan and Assam, and one in Punjab would also be not available for the Chinese firms because of their proximity to India’s border.
However, Kerala-Konkan region and deep sea blocks off Andaman & Nicobar Islands are being kept off-limits for the Chinese because of presence of “vital installations”. “Sensitivity of defence installations needs to be kept in mind at the time of allocation of these blocks for exploration activities,” it says.
In a similar strategic consideration, three deepwater blocks in Krishna-Godavari basin are proposed only for Indian companies for exploration. And in four shallow water blocks south of West Bengal, the ministry is categorical that exploration activity should be by an Indian company “preferably an Indian PSU”.
For all other bidders, the ministry has directed that the government-approved guidelines on overseas procurement of sensitive equipment be made binding.
“The petroleum ministry may devise a specific standard operating procedure on the issue, after incorporating the guidelines, once the same are approved by the government,” it says. The petroleum ministry plans to invite bids in February and recent indications are that only 46 blocks have been cleared by all concerned ministries.