China and India Forge Oil Alliance

Under their agreement, Chinese and Indian oil companies will establish a formal procedure to exchange information about a possible bid target, before agreeing to co-operate formally.

Published: 13-Jan-2006

p; China and India, the world's two fastest growing energy consumers, on Thursday set aside long-standing rivalries and agreed to co-operate in securing crude oil resources overseas.

    The agreement, aimed at preventing the two nations' competition for oil assets pushing up prices, symbolises their increasingly assertive role in global energy politics.

    In an age of growing energy insecurity "it makes sense for India and China to co-operate [rather] than compete . . . the time of access to easy oil is in the past", said Jim Steenhagen, managing director at PFC Energy, the US consulting firm.

    The agreement came as fears over a serious threat to oil supplies from Iran began to rattle the market yesterday. Prices rose above $65 a barrel on the New York Mercantile Exchange as Tehran's nuclear ambitions threatened instability at the centre of the world's main oil-producing region.


Visits to China, India, Malaysia and Pakistan are significant because the trip spells out the Saudi Kingdom's Look East policy, representing a new reorientation in its foreign policy that was heavily tilted toward the West.

The worst two scenarios suggest a drastic decline in output to 875,000 barrels a day by the end of 2007 and to just 520,000 a day by the end of 2008.

Bush said he envisioned a future in which a plug-in hybrid car could drive 40 miles on a lithium-ion battery, then stop at a filling station for ethanol, a fuel usually made from corn, similar to HyMotion Prius pictured below.


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