India makes strategic moves in distant Sudan

By Siliconindia

KHARTOUM, Dec 26, 2003 — Indian made Tata buses, Maruti Suzuki cars, Mahindra and Mahindra jeeps and Bajaj autorickshaws have a highly visible presence in the chaotic traffic of Sudan’s capital city.

But what has really stamped Indian presence in Africa’s largest nation is the visionary decision of the Oil and Natural Gas Corporation (ONGC), India’s oil and gas major whose tentacles are spreading globally, to buy a 25 percent stake in the Greater Nile Oil Project (GNOP) – a venture that is fuelling poor Sudan’s dream of becoming a major oil-exporting power.

India is getting three million tonnes of crude from Sudan through the project – in which Chinese and Malaysian oil companies also have substantial stake – and is looking at building on its current investment of $670 million in this country to obtain around eight million tonnes of oil annually.

ONGC’s overseas arm OVL (ONGC Videsh Ltd.) bought the stake from Canada’s Talisman in the multinational consortium after the latter had to pull out following criticism from church groups and human rights organisations, who accused it of supporting the country’s ruling establishment in the suppression of southern rebels in the decades-old civil war that has claimed over two million lives.

At that time the ONGC’s decision was criticised back home as a decision driven in haste since Sudan, embroiled as it was in its fratricidal conflict, was not seen as a country that could guarantee the security of Indian investment – the largest foreign investment in any country.

But with peace moves afoot between the country’s rival factions and President George W. Bush himself offering to preside over a conciliation ceremony at the White House, India’s strategic stake in Sudan may not have come at a better time.

“Oil is emerging as an instrument of determining frontiers in international relations and for India to have taken equity in a Sudan oilfield shows great foresight,” said Abdal Mahmood Abdalhaleem Mohammmad, the country’s ambassador to India.

“It is a turning point in the history of Sudan,” says Ashok Kumar, India’s ambassador here, about the ongoing peace talks in the Kenyan city of Naivasha.

“If the peace process succeeds, it will unleash the floodgates of development in the country and that will present a huge opportunity for India,” Kumar told IANS here.

“And given the tremendous goodwill that India enjoys in Sudan, Indian companies will have a better chance.”

India and Sudan have not only old historical linkages but also strong political bonds, going back to the days of India’s first prime minister Jawaharlal Nehru who, along with Sudan’s first prime minister Ismail al-Azhari, was a founder member of the Non-Aligned Movement.

Since then Sudanese students have preferred India as a higher education destination and many among this multi-ethnic country’s ruling elite are alumni of Indian universities, especially Aligarh Muslim University.

But it was oil and India’s participation in its prospecting that really gave the ties a larger strategic dimension. It was a historic moment for both countries when the first shipment of 80,000 tonnes of crude was received by India’s Deputy Prime Minister L.K. Advani at Mangalore port last summer.

The oil had come all the way from Port Sudan, whose historic significance for India lay in the fact that Mahatma Gandhi had halted there in the 1930s on his way to Britain.

Now India is seeking to enhance its stake in Sudan by not only picking up newer oil exploration blocks but investing another $750 million in the modernisation of the country’s state-owned refinery and building a pipeline from the Khartoum Refinery to Port Sudan on the Red Sea.

Complementing its equity investment in oil, ONGC is seeking to demonstrate its philosophy of social responsibility through a series of community participation programmes in health, agriculture, information technology and sports.

Appropriately called ONGC Nile Ganga BV, the wholly owned Sudanese subsidiary has earned tremendous local goodwill by sponsoring the highly popular Merreikh football club, a project that is being hailed as an “unprecedented partnership” between a sports club and an oil company.

With three top Sudanese ministers, including the defence and energy ministers, visiting India this month and an Indian ministerial and parliamentary delegation due to visit this country in the next four weeks, bilateral ties reflect what the Sudanese envoy says is “India’s political and economic investment in the strategic gateway of Africa”.

Sudan is located in the Horn of Africa with common borders with as many as nine countries.

“With its presence in Sudan, India can promote cooperation in diverse fields like petroleum, agriculture, railways and sugar industry not just with Sudan but with its neighbours as well,” says Rajen Harshe, political science professor at the University of Hyderabad who was here to attend an India-Sudan seminar organised by the University of Khartoum.

“It could open up large untapped markets for India in north and sub-Saharan Africa, besides giving the country a strategic foothold in an important region.”