Archive

Business

An exercise of speculation:Vedanta,Adivasis, Mannar Basin and the Tamil genocide – Part 2

April 14, 2013
Business, Genocide, India, Oil, Rajapaksa
Leave a comment
Protest againts Vedanta for its operations in India.

Protest againts Vedanta for its operations in India.

It was a quest for survive that pushed Vedanta to find another, lucrative business. In fact its plan for more than $5.8 billion to increase the Aluminium production has been rejected by the government, due to mounting international pressure to protect the Adivasis in Niyamgiri Hills[1]. The repercussion of that failure is big enough to be the mover for the challenge against Ambani’s Reliance.

 Cairn main assets in India are in Rajastan, a huge field estimated in billions of dollars. That was the jackpot for a small venture like Cairn; But to compete with Reliance, you need to be much bigger and much linked to political power. Requirements that Vedanta matches. On the other hand, to exploit Vedanta’s economy of scale, Agarwal needed to grab any possibility on the market.

The Mannar Basin oil fields were ideal. Unfortunately the Sri Lankan civil war was a major obstacle, with the fierce LTTE ready to go all way for the cause of independence. The Sri Lankan government lacked the political will to annihilate the rebels.

A march of the Balck Tigers, the LTTE special forces for suicidal attacks.

A march of the Balck Tigers, the LTTE special forces for suicidal attacks.

In fact 20 years ago, when the Indian Peace Keepers intervened in the fight, Colombo incredibly re-armed the rebels, just to kick out New Delhi from the island[2]. In 2005 the parties were close to a peace treaty. But while Sri Lanka was ready to devolution, the LTTE wanted a clear path to secession. Meaning: conflict could last for another generation.

So the new President Rajapaksa changed the strategy[3]: now it was complete destruction of the rebels. Why this stance wasn’t adopted earlier? Two reasons: civilian casualties involved in chasing the guerrilla forces. And India. New Delhi never really approved the elimination of the LTTE (though responsible of the killing of Rajiv Gandhi). But in 2006, the Indian position changed. Suddenly New Delhi offered complete support: maritime patrol, electronic surveillance, military and political backing (the Tamil nationalist sentiment in Tamil Nadu were controlled by the then Chief Minister, Mr Karunanidhi, a hard-core supporter of LTTE, but involved in a personal scandal during that period[4]).

In 2009 80000 Tamil civilians have been massacred on the shores of Nandikadal lagoon and in Mullivaikal.

In 2009 80000 Tamil civilians have been massacred on the shores of Nandikadal lagoon and in Mullivaikal.

The rest is history: from the bloody shores of the Nandikadal lagoon, 280 000 Tamil civilian come out, leaving behind possibly more than 80000 dead. The fate of the Tamil population in their land now is the one of an occupied country. The military presence is strangling any activity.

But the Mannar Basin fields are blooming. In 2013 Sri Lanka launched another bidding round, this time everybody in the sector was queuing: Exxon, Total, Gazprom, Eni[5].

Clearly the news of Cairn-Vedanta success reached the big players of oil and gas.

The question now is: who could provoke a radical change in the Indian policy towards Sri Lanka? Cairn is out of the question.

Vedanta entered the game only in 2011, when the war was over since 2 years. If you believe in conspiracy, you could suspect that Vedanta chased the deal much earlier, convinced the Indian government to intervene in its favour and Cairn to spearhead the negotiation to avoid attention.

Of course this is just an exercise of speculation.

The signing ceremony of the agreement of petroleum resources between the Government of Sri Lanka and Cairn India (Pvt. Ltd) . President Mahinda Rajapaksa, Minister of Petroleum and Petroleum Resources A.H.M. Fowzie and Indrajith Benerjee, Chief Finance Officer and Ajay Gupta Head of Commercial and New Business of Cairn India . Photo Sudath Silva

The signing ceremony of the agreement of petroleum resources between the Government of Sri Lanka and Cairn India (Pvt. Ltd) . President Mahinda Rajapaksa, Minister of Petroleum and Petroleum Resources A.H.M. Fowzie and Indrajith Benerjee, Chief Finance Officer and Ajay Gupta Head of Commercial and New Business of Cairn India .
Photo Sudath Silva

An exercise of speculation:Vedanta,Adivasis, Mannar Basin and the Tamil genocide – Part 1

April 12, 2013
Business, India, Oil, Politics
1 Comment
agarwal ambani

Mr Agarwal, founder of Vedanta and Mr Ambani, chairman of Reliance Industries

With the purchase of Cairn India, Mr Agarwal, boss of the mining powerhouse Vedanta resources, officially challenged the dominance of Reliance Industry, the Ambani’s giant in petrochemicals and refining[1][2]. Vedanta and Reliance were undisputed kings in their respective sectors: complementary and parallel. Both can count on mighty political clout and this feud showed their potential: in defence of Ambani’s Reliance went in Mr Sharma, chairman of the state-owned ONGC and Petroleum Secretary Mr Sundareshan. On the camp of Agarwal’s Vedanta, nobody less than UK’s Prime Minister David Cameron[3].

Mr Cameron pubblicly lobbied in favour of Vedanta with Mr Singh.

Mr Cameron pubblicly lobbied in favour of Vedanta with Mr Singh.

The bone of contention is simple: oil. In Sri Lanka[4]. Offshore of the Mannar Basin lie reserves up to a billion barrels. Reliance Industry was drilling on the Indian side of the Strait, but when the government of Sri Lanka offered the exploration rights in 2007, they Ambani’s group declined. Why?

Well there are always a lot of risks associated with oil extraction, first of all, there is no guarantee of discovery, second it could be not commercially viable to extract it.

But the Mannar Basin case was even riskier: it was the theatre of a civil war. The area was under the control of the LTTE, one the fiercest guerrilla army in the world. Surely if you buy, you want some guarantees that your will be able to access your property.

The LTTE navy, the Sea Tigers, guaranteed the security of sea lane supply for more than 30 years.

The LTTE navy, the Sea Tigers, guaranteed the security of sea lane supply for more than 30 years.

Now the company that was awarded the concession was Cairn, a small venture based in Edinburgh (with the bulk of their interests in India). What was the level of political leverage that Cairn could exercise to demand for assurance? Null. The management of Cairn, we are supposed to believe, bought the exploration rights with no further collateral for their purchase, no political promise that their property will be their hand soon.

But in 2011 Vedanta saved the “Scottish” company with their offer[5]. The operation was hardly contested by the Indian government; as we have seen, the move was an aggressive entrance in the landscape of Reliance and Ambani’s clan didn’t particularly welcome the new comer[6].

Agarwal acknowledged the leading role of Ambani: “They (Reliance) will continue to be the largest player. But, at the same time, there is enough water in the sea for other players to also do business.” [7]

If you are familiar with the Indian capitalism, you know very well that the big players are running monopolies supported by political protection. Competition is sacrilegious. So why Agarwal decided to challenge so directly Ambani?

Adivasis fighters.

Adivasis fighters.

Rumours go that he was concerned for his venture in Orissa[8]. Vedanta was involved in a billion mining project; they received of course all the authorization from the central government, but a small detail was blocking the operations: 80 million of Adivasis, the Indian Aborigines. The inconvenience was due to be quickly removed with mass evictions; this led the Adivasis to join the Maoist guerrilla, but Vedanta wasn’t worried: in fact the central government declared this insurgency (sometimes the Adivasis attacked with bows and arrows) as the nation’s main security threat: more than the archenemy, atomic-armed Pakistan. Operation Green Hunt was launched to eradicate the Maoist[9] and incidentally, any obstacle to Vedanta manoeuvres. Unfortunately for Vedanta, public and international outcry sprung in favour of Adivasis and suddenly the big deal, despite all the political support, was in peril[10]. The Orissa crisis urged Vedanta to look for alternative business[11]. Quickly.

De-colonization: facts and fiction in Sri Lanka

April 4, 2013
Business, Oil, Rajapaksa, SL Government
Leave a comment

chavezIt is nice to have legions of commentators, punters, analysts to discuss and to deconstruct the international relations of states. All this convoluted deployment of intellect is a way to entertain the public opinion, which is growing more and more educated and can be fooled easily.

Take the Bolivarian revolution of Chavez in Venezuela: roaring speeches on one side, “world public enemy number one” on the other. 70% of Venezuelan oil goes to the US; Chavez has been Swissly through and precise in the repayment of Venezuelan bonds: Goldman Sachs and the other made a fortune with the socialist revolution[1].

In Sri Lanka, the government of Rajapaksa is strenuously resisting the siege of Western powers; Sri Lanka stands the assault of foreign interference in national sovereignty. But the substance of the critics is: where are the 80 000 civilians missing. Of course nobody mentions this; the confrontation in the diplomatic sphere is about government-sponsored recommendations that the government doesn’t implement. President Rajapaksa is using the international stage to re-affirm the right to develop: de-colonized nations to choose their own destiny. Standing ovation.

Cairn India Chairman Sundeep Bhandari and Executive Director/CFO Indrajit Banerjee presents the documents to President Mahinda Rajapaksa. Prime Minister Ratnasiri Wickramanayake and Petroleum and Petroleum Resource Minister A. H. M. Fowzie are also in the picture.

Cairn India Chairman Sundeep Bhandari and Executive Director/CFO Indrajit Banerjee presents the documents to President Mahinda Rajapaksa. Prime Minister Ratnasiri Wickramanayake and Petroleum Resource Minister A. H. M. Fowzie are also in the picture.

In private he sold at bargain prices concession for oil exploration. Cairn-Vedanta will pocket 90% of the sales from the Sri Lankan oil[2]. Now, if you are a colonial power, will you prefer to have a hard confrontation on the matters that count, like oil or empty speeches about principles and human rights?

Rajapaksa is working hard for colonial powers and the colonial powers are benefitting with sound, material profits. In public they accuse each other, reinforcing the perception of a clash: European citizens are satisfied of fighting (diplomatically) the right cause and unknowingly (?) pocketing the money; Sri Lankan citizens are happy of maintaining their independence and unknowingly (!) to be stolen once again by the Europeans. When the two parties are extremely happy of the contract, either the deal is very good or it is a scam.

Sri Lanka oil: Mannar Basin’s new exploration bidding round

March 11, 2013
Business, Economics and Finance, Oil
Leave a comment

bidding oilOn the 7th of March 2013 Sri Lanka’s government held an international road show to facilitate the bidding process for the offshore exploration rights for several blocks[1], locations: Houston, London, Singapore.

It may be interesting to note two facts: in this round there is almost a unanimous interest: Exxon, Total, Eni, BP, Gazprom, Petronas[2].

This enthusiasm probably derives from the successful operations of Cairn-Vedanta. The Anglo-Indian company in 2011 found oil.

This leads to the second interesting fact: the previous road show was held in 2007[3], same locations (Houston, London, Singapore). Did anybody hear about the Eelam War? It ended quite bad for the LTTE, the separatist army, which was annihilated and also for more than 360 000 Tamil civilians, chased out like wild animals. More than 80 000 civilians are supposed to have died in the final stage of the conflict. Well, in 2007 the war had just re-started. Not a surprise that the bidders were a bit more cautious.

rajapaksa oil cairn agreementIn fact the LTTE was one of the best trained, motivated and fierce liberation army in the world, with an exceptional navy. During the civil war, the LTTE navy, the Sea Tigers have been able to evenly match the Sri Lankan one. The region controlled by the Tamil Tigers was run like a state, with banks and post offices. And it was rely heavenly on sea supply lane. So it was vital for the LTTE to have a successful protection from the sea. Then in 2007 India started patrolling. India’s position has been ambiguous, to say the least, with the LTTE.

But in 2007 the idea of buying exploration rights in war zone was simply mad. Unless the government pledged beyond any reasonable the certainty of the deal…

How can you guarantee such agreement during a conflict?

Probably you planned carefully to eliminate any resistance, any dissent. And with 1 billion barrels of oil, you can buy international support and help.

Old colonial games: the French chapter

March 6, 2013
Business, Economics and Finance, Geopolitics, Oil
Leave a comment

no war franceFrance became the global defender of peace and international justice when it antagonized the USA for the war in Iraq. Legions of citizens looked at Paris as the guardian of civilization: again the nation of liberte egalite fraternite stood against the brutal, warmongering forces which regularly try to strangle the universal values of citizenship and human rights. Very well, nice, lovely. Only, France didn’t oppose USA for those reasons; it is true that they considered the war in Iraq as unlawful: but the big problem was that they were excluded from the loot, not the war itself!

In fact France is not against colonial imperialism: it was one of the major colonial forces in the past; what France object is to be left behind in the race. In Iraq Paris could clearly see that the Iraqi oil was going all in American pipes. Mon Dieu! Never again!

france warSo when the Arab spring shook the region, France was more than ready to invade another country and to plug French pipe in the Libyan oil wells. The war in Mali signifies a new commitment of France in Africa. Mali’s undersoil is supposed to contain uranium, oil, gas and gold[1]; it is also a neighbour of Nigeria, which has an increasing agitated scenario by its own Islam groups[2]. Whatever the reason, France is on the move to re-assert its sphere of influence[3].

kouchner milibad

France and UK foreign ministers Kouchner and Miliband meet Sri Lanka’s President Rajapaksa.

So I have a rule of thumb: if you see a French diplomat on the move, ask yourself what business is in sight. During the last days of the Eelam War, we saw Kouchner and Miliband (respectively France and UK foreign ministers) running to make pressure on Colombo’s government. What kind of pressure? Well some photographic posing, speeches in favour of human rights and the rule of law. In brief, absolutely nothing. Now, Great Britain has very clear economic interests: they sell weapons to Sri Lanka and they are actively involved in the oil exploration in the Mannar Basin. Cairn and Vedanta are listed in London, though they are Indian companies. But France will remain seated while others are making money in the usual colonial way? Mon Dieu, impossible!

Parithi killing in Paris

LTTE member Parithi Killed in Paris, 2011

Last year a former LTTE leader (the secessionist Tamil movement, defeated in 2009 with the massacre of 80 000 civilians),  Nadaraja Matheetharan alias Parithi was killed in Paris by agents of the Sri Lankan secret services[4]. My big question was: how France can allow such a move on its soil? Especially after Sri Lanka should maintain quite a low profile with the international community and the West… What happened?

Well Cairn and Vedanta don’t hold an exclusive of exploration: they have concession for ONE zone. In the 2013 Sri Lanka will organize another round of auctions. Which are the front-runners? Exxon and Total[5]. I think we’ll hear a lot of noise in Geneva about committee and votes, and alignment, and new resolution and all this sort of empty talking. I suspect that the murder of Parithi was a “gesture of good will” from France in the perspective of the oil exploration rights bidding. totalHuman rights declaration is not worth the paper is written on if you don’t have the political will to enforce it. Mon Dieu, colonial times are over, can can’t interfere in internal matters, we only give wise, impotent advices. Of course the farcical clash of interest is merely superficial: the government of Sri Lanka can show its citizens and supporters that they stand against the old colonial power, the European countries can show their own citizens, they stand for the right cause, but diplomatic route will take time. And we have plenty of time, don’t we? History is not written in a day, oil contracts are. Anything else left to discuss in Geneva?

Sri Lanka killing fields are also drilling oil: India and Sri Lanka’s alliance on counter-insurgency

February 4, 2013
Business, Genocide, Geopolitics, India, Oil, Rajapaksa
1 Comment
Adivasis revolutionary fighters

Adivasis revolutionary fighters

What is the biggest threat to India’s security? You could think of further terrorist operations orchestrated by their arch-enemy Pakistan, the so called containment strategy of China with the String of Pearls, but no, you would be wrong. Surely the Indian armed forces and the RAW, the secret service are taking into account these issues as future menaces. But the current, biggest threat to internal security is the Maoist guerilla of the Naxalites, which count amongst its file indigenous warriors armed with bows and arrows. Members of the Adivasis, the indigenous ethnicity of India, more than 80 millions, are fighting back against the oppression by the central government and joined the Maoist militia in several states. The some of the Adivasis are tired of being discriminated and most of all expropriated of their land rights.

Adivasis's rally

Adivasis’s rally

And New Delhi, the biggest democracy of the world, the strong ally of the good Western government amongst the dodgy, authoritarian Asian states, responded with a responsible, measured, contained military operations, called Green Hunt. In collaboration with the regular forces there are also paramilitary troupes, funded by private stakeholders. These are the best practices exported by the USA during the Afghanistan and Iraq wars and we should admire the consistency of India in aligning itself with the best Western policies.

Adivasis' protest against Vedanta

Adivasis’ protest against Vedanta

You may ask why the Indian government is so upset with indigenous populations, who lived for millennia in their forest, with unchanged habits and astonishingly sustainable behaviour, why they are fighting these groups rather than picking them up as global models? Easy to answer, it is the case that they live where there are enormous reserve of metals and minerals. And given the needs of the growing Indian economy and the worldwide prices, many companies are salivating at the idea of grabbing those mines. In particular the giant Vedanta secured vast concessions. And they want to exploit them, so they supported this massive campaign to evict the Adivasis from their property.

Sri Lanka Defence minister Gotabaya Rajapaksa, with alleged blood stains on his shirt.

Sri Lanka Defence minister Gotabaya Rajapaksa, with alleged blood stains on his shirt.

A generous offer of consulting about the matters arrived from Sri Lanka. Gotabaya Rajapaksa, brother of the president Mahinda and plenipotentiary minister of Defence, not to mention acclaimed leader of the army and potential war criminal for the massacres of 2009, offered his help1.

Mr Rajapaksa exposed his rationale: we have matured an extensive experience in counter-insurgency and we learned how to deal with fighters mingled with civilians. You have only to control the media and position yourself wisely in the international scenario, then you can do whatever you want. Seriously, you can slaughter hundreds of thousands (yes, around 3 times the victims in Sirya) of civilians and nobody will mind your business.

If you think that I’m exaggerating, many Indian commentators thoroughly studied the Rajapaksas’ strategy and compiled a brief guideline that is precisely mentioning control over the media, international relations and steel determination to achieve the goal, regardless of civilian casualties2.

Gen. Bikram-Singh visits Sri Lanka President Mahinda Rajapaksa.

Gen. Bikram-Singh visits Sri Lanka President Mahinda Rajapaksa.

Finally Rajapaksa can offer an already integrated plan of action: Sri Lankan and Indian forces not only conducted joint operations in the past. During the IV Eelam war, military officer from the Indian forces were actually on the field, monitoring, observing, advising and cooperating with the Sri Lanka’s Army. New Delhi is perfectly aware of what happened in 2009 and the fate of the so called “brethren” Tamil. Tamil Nadu politics is based on the support to the Tamils on the other side of the Strait. At least this is the main characteristic of one of the most important politician, Mr Karunanidhi, who was Chief Minister of Tamil Nadu during the final days of the war and who didn’t move a finger to safe his beloved bretheren because was involved in a massive scandal of corruption.

In a matter of days, India answered, that, yes, they are quite interested in the Sri Lankan offer to train them on counter-insurgency. Quoting Gen. Singh: “With significant experience on both sides, we have a lot to learn each other and we look forward to reinforcing our cooperation in the military domain further”3.

Sri Lanka granted exploration right to Cairn back in 2008

Sri Lanka granted exploration right to Cairn back in 2008

A final note: in the Mannar Basin, offshore from the coast controlled by the LTTE and scenario of the massive, brutal counter-offensive of the Sri Lankan army, in which almost 440 000 civilians have been chased like wild animals for months, it has been found oil.

And guess who is taking control of those oil field? You’ll never get it. It’s Vedanta again!

So Vedanta is conducting paramilitary operations in India to evict Adivasis, and then it turned to Sri Lanka to expropriate the Tamils because of the oil, using the ruthless Rajapaksa regime as (happy) executioner of the dirty job. If it was a Hollywood movie, you had say that the figure of the evil company exploiting natural resources and killing poor indigenous would have been too clichè to be true. As usual reality is more surprising than fiction, much more.

290 000 Tamil civilians come out from the last siege of the Sri Lankan army.

290 000 Tamil civilians come out from the last siege of the Sri Lankan army.

Time, Oil and war games. The Falklands case

January 28, 2013
Business, Economics and Finance, Geopolitics
Leave a comment
Advance: A line of British soldiers in camouflage during the Falklands WarPhoto mirror.co.uk

Advance: A line of British soldiers in camouflage during the Falklands War
Photo mirror.co.uk

The Falklands war was not oil-driven. In the first place, it was started by a military dictatoriship in Argentina to distract public attention. Second, the UK response was equally motivated to captivate the electorate and to twist public sympathy towards the Tory. It was risky? Probably yes, but it paid wonderfully well for Margareth Tatcher.

These were the driving forces in 1982 to catalyse an armed conflict. And yet everybody at the time knew that around the Falklands it was plenty of oil. How much? Well, these are always estimates, but it seems that the reserve could amount to 60 billions (almost a quarter of Saudi Arabia reserves. Not bad) but probably only 3.5 are commercially recoverable1. Since the 1994 Argentina and UK have been in negotiations to settle the matter after the conflict. But Buenos Aires walked away and from 1998 British companies have started to try their luck2.

Falkland Oil & Gas shares halved after an update on operations around the Falkland Islands. Photograph: Gary Clement/Reuters

Falkland Oil & Gas shares halved after an update on operations around the Falkland Islands. Photograph: Gary Clement/Reuters

Nowadays oil exploration is at an advanced stage in some platform and production in at least on well (Rockhoppen Sea Lion, almost 1,3 billion barrels, expects to start its first shipment by 20173).

The question is: did the Brits have a good idea about oil presence in the Falklands? The answer is a sound and round yes. The first time the British government knew about oil in the Falklands was in the remote 1969. At the time Richard Crossman, member of the cabinet, wrote in his diaries that the Foreign Office wanted to conceal the thing and prevent any further testing4. The Foreing Office feared of a possible aggravation of the territorial dispute with Argentina. Why? In public the British government was confident and bold about legitimacy of its claim. In private not so much. In 1936 John Troutbeck, head of Foreign Office American Department summarized difficulty of Britain’s position:

“Our seizure of the Falkland Islands in 1833 was so arbitrary a procedure as judged by the ideology of the present day. It is therefore not easy to explain our possession without showing ourselves up as international bandits.”5falkland capture

By 1975 almost 50 companies had applied to Britain for exploration rights. So when in 1982 Gen. Gualtieri invaded the islands, London proclaimed to intervene to safeguard the independence of the Falkland inhabitants and give them freedom of choice. Beside the fact that after the seizure in 1833 they evicted all the Argentinian citizens, so in the Falklands were living only British descendants, few years earlier, they had no problem in forcing the evacuation (against their will) of the inhabitants of the Diego Garcia, an island in Indian Ocean. Moreover all the inhabitants of the Falkland are working for a private company, which is basically the sole employer and land owner of the island: the Falklands are basically private property6.

 The war is still remember as a tremendous success for the British army and it represented a turning point for the electoral success of a Tory party that was depressing an entire generation of workers. 30 years later those military operations proved to be also a good investment. And it didn’t happen accidentally.

Cairn Lanka is commencing seismic acquisition in Mannar Basin with an investment of over US $ 100 million. President Mahinda Rajapaksa flagged off the first ever 3D Seismic activities in the Mannar Block from the Colombo Port recently. Photo dailynews.lk

Cairn Lanka is commencing seismic acquisition in Mannar Basin with an investment of over US $ 100 million. President Mahinda Rajapaksa flagged off the first ever 3D Seismic activities in the Mannar Block from the Colombo Port recently.
Photo dailynews.lk

Now, 1 billion of barrels are lying in the Mannar Basin, with commercial production expected by 20147).

Exploration rights were sold before the end of the war and when the block was still in an area under the control of the LTTE. The company, Indian Cairn, listed in the UK, has been sold to another Indian corporation, the giant Vedanta, listed in the UK as well.On its side of the Strait India has oil operations (it was even speculated that it could stolen from the Sri Lankan reserve).

Are we still asking why India helped Sri Lanka in slaughtering 70 000 Tamils? Or why the UK remained silent and recently invited president Rajapaksa for the Diamond Jubilee?

Nothing new under the sun, nothing.

Sri Lankan Tamil regugees (IDP) from the Mannar region.Photo AP

Sri Lankan Tamil regugees (IDP) from the Mannar region.
Photo AP

2006 is the year: Sri Lanka, LTTE and the oil alliance

January 22, 2013
Business, China, Economics and Finance, Genocide, Geopolitics, India, LTTE, Military, Oil
Leave a comment

IV eelam warIn this year, the IV Eelam War broke out. After the attempt of the Peace Talks from 2001 to 2005, both parties strove to resume hostilities. Many reasons have been added for the failure of the peace process. For the LTTE and especially its leader, Prabhakaran, the agreement was to far away from full independence. Of course that target was impossible to reach through negotiations, therefore only the military way was open for that purpose. On the other side the Sri Lankan government had promised even too much in the eyes of its more nationalistic constituency. Therefore in 2006 everybody was keen to start again the war.

Erik Solheim and Velupillai PrabhakaranPhoto nation.lk

Erik Solheim and Velupillai Prabhakaran
Photo nation.lk

The biggest loser was Norway. The Nordic country in fact dedicated a lot of efforts to find a deal. If you consider that from 2001 TGS-Nopec, a company specialized in seismic survey for oil exploration, was showing enthusiastic reports about the possibility to find petroleum reserves, you may guess that the government in Oslo had some undisclosed interests. If you add that the special envoy, Mr Erik Solheim, just on the brink of the Peace Talks ending was nominated Minister for International Development1, with specific interest in the oil sector, for the Norwegian initiative “Oil for development”,Norad2, (see Solheim’s activity in Ghana3, Sudan4, Angola5).

 But Norway is not the only country in the world searching for opportunities in the oil sector. China and India in the same period were involved in a tough race to secure contracts for natural resources

Union Petroleum Minister Mani Shankar Aiyar with the President of China National Petroleum Corporation, Chen Geng in Beijing on January 13.

Union Petroleum Minister Mani Shankar Aiyar with the President of China National Petroleum Corporation, Chen Geng in Beijing on January 13.

around the world. The competition was so strong, that their bidding war was driving prices up everywhere. Thus the two Asian giants decided to form an alliance. “The agreement aimed at preventing the two nations competition for oil assets pushing up prices, symbolises their increasingly assertive role in global energy politics” (source: Financial Time).6

 One of the first country to test this alliance, was precisely Sri Lanka. President Rajapaksa, soon after he received information about the possible presence of oil in the Mannar Basin, decided to get rid of Norway and offered India and China one block each 78.

We are far from saying that the Peace Talks were interrupted for the oil discovery; we are also not affirming that the IV Eelam War was oil-driven and that the India and China support of Sri Lanka was motivated purely by the natural resource deal.

We can see a series of coincidences and we argue that oil played a role in Sri Lanka, maybe only a secondary one, but not completely marginal. Norway is our first indicator; the Nordic country didn’t though it could provide more transparency on its conduct, but had clearly a vested interest in the peace process in relation to the oil reserve. China and India had additional reasons to back

Anti-lankan protest led by politician and activist Vaiko in Tamil Nadu.Photo onlanka.com

Anti-lankan protest led by politician and activist Vaiko in Tamil Nadu.
Photo onlanka.com

Colombo, but it was a clever and opportune gift from Rajapaksa to offer natural resources in exchange of their help. In particular it could have represent the convincing point for New Delhi, to intervene without hesitation. India has oil operations on its side of the Strait, and the idea of leaving oil reserve in the hands of the LTTE or China alone could have been the decisive argument to make move. The energy sector is more vital and strategic for India that any other alliance of convenience between China and Sri Lanka.

If you think that oil doesn’t play any role in conflicts around the globe, then you can ignore our thesis. On the other hand, if you assume that natural resources are too important in contemporary geopolitical scenarios, and so are always involved, maybe to different extent, you may be tempted to spend more time on this hypothesis.

 

Malaysia’s intervention in Sri Lanka: not quite what expected by the Tamil Diaspora

December 28, 2012
Business, Oil
1 Comment
Thaipusam festival. Tamil in Malaysia

Thaipusam festival. Tamils in Malaysia

Malaysia is home of a numerous and influential Tamil community. Much of the Indian part of the population comes from Tamil Nadu and Sri Lanka.

The LTTE was quite active in the South East, especially Singapore and Kuala Lumpur precisely for this friendly support. Still today the Tamil community is extremely vocal in bringing justice to the war crimes committed in 2009. In Malaysia there are several members of parliament, activists, businessmen passionate for the cause. Some results of this lobbying can be seen in the Malaysian attempts to look into the case1.

 The Tamil community in Kuala Lumpur is very active in promoting events, conference and meeting to mobilize and to sensitize public opinion and government. Their effort aims to insert in the regional agenda this subject.

Malaysian Parliament

Malaysian Parliament

So far Malaysia has been quite reluctant to take a stance. But the ruling party will face elections soon and there is no better way to captivate the strategical Indian vote, than pleasing this community with a strong campaign in favour of justice and accountability.

But Sri Lanka started to court Petronas2. Colombo invited the Malaysian company to explore the Mannar Basin where oil has been found by the Indian company Cairn in 20113.

Executives from Petronas showed interest in the proposal and it seems they are ready to sign a Memorandum of Understanding for further activity4.

If it will be proved that Sri Lanka has commercially viable oil reserves, what will it be the position of Tamils in Malaysia? All their activity could simply vanish like snow in the sun. This could be a test for the capability of the Tamil community to engage the public.

Petronas Tower in Kuala Lumpur

Petronas Tower in Kuala Lumpur

If they act promptly they still have some chances to address in their favour Malaysian business policy. But if they wait until the deal is sealed, it is very unlikely that negotiations will be re-opened.

Probably the intervention of the Tamil diaspora is driven almost entirely by ideology and it can become self-referential and limited in its action to the community itself. More attention to the business and economic decisions surrounding the cause would be helpful in shaping public opinion in relevant matters.

Oil Global Quest: The Asian Race for Natural Resources

December 13, 2012
Business, China, Geopolitics, India, Oil
Leave a comment

nigeria oilIt is talking for stake in Mozambique’s Rovuma-1 gas field, is gazing 1 million barrels of crude oil in Ghana, has sent its special envoy in Sudan, has planned to boost investment in oil sector in Venezuela. Who is it? A little help: it is an Asian country with more than 1 billion people. And no, it is not China.

Surprise?

India’s growth is probably less spectacular and iconic than China’s, yet the magnitude is similar. And so it is its thirst for natural resources. China is scary, instead India has the reassuring smile of a Santa Klaus Mohamon Singh, it’s the biggest democracy, no Bollywood villain can seriously be taken as a menace.

India's Prime Minister Mr. Manmohan Singh.Photo Reuters

India’s Prime Minister Mr. Manmohan Singh.
Photo Reuters

India has a friendly face. The worst it can happen with India is that they will start to dance and to sing in falsetto. Yet, New Delhi needs natural resources, desperately. In particular, oil. Loads of oil. India in 2011 consumed a third of the oil of China, but China produced also a third1. China imports almost half of its need, India almost all2. And the future could be even more unbalanced for New Delhi. It is fair to say that India is looking as ravenously as China for new oil sources.

As we mentioned in the introduction India was in talks over the stake in Mozambique’s Rovuma-1 gas field3, with Ghana about equity participation and industrial collaboration4 and also for a contract of more than 1 million barrels5, has sent a special envoy in Sudan6 with the clear mandate of lobbying for India in the competition with China over the Sudanese oil; finally, it is investing in Venezuela more than $ 2 billions7.

Union Petroleum Minister Mani Shankar Aiyar with the President of China National Petroleum Corporation, Chen Geng in Beijing on January 13.

Union Petroleum Minister Mani Shankar Aiyar with the President of China National Petroleum Corporation, Chen Geng in Beijing on January 13.

This competition with China is not new. In 2006 they signed an agreement to stop such a bidding war that was driving up prices worldwide8. In 2012 in a very unnoticed press release, they “agreed to “work together to maintain peace and stability of the Asia-Pacific region”. The “consensus” was reached during the recent visit of the Chinese defence minister General Liang Guanglie to India, the first such visit since 1976.”9 Few months earlier their race for the assets in the Western Hemisphere attracted some attention by the analyst10.

India and China will maintain internal stability only with massive growth, which in turns will be possible only through a constant, reliable access to natural resources. The human cost for this race will be enormous. In India the group Vedanta launched a para-military campaing with the support of the New Delhi (“operation Green Hunt”) to evict the Adivasi11 people from the mining site.

India is looking everywhere for new possibilities. So it was very welcomed news when they discovered fields at home in Gujarat12, the Andhra Pradesh13 and the Cauvery Basin14. Since 1981 presence of oil on the Indian side of the Basin were confirmed15.

Cairn India was awarded the contract for oil exploration in block No.2 of the Mannar Basin and has signed a petroleum resources agreement with the government of Sri Lanka.

Cairn India was awarded the contract for oil exploration in block No.2 of the Mannar Basin and has signed a petroleum resources agreement with the government of Sri Lanka.

So it was only a matter of time before they found oil on the Sri Lankan one. Indeed. In 2011 Cairn launched a press release where they announced the oil discovery16.

If you consider that the Sri Lankan government in 2006 assigned one block each to China and India for further exploration, then you’ll have a more complete framework of the Chinese and Indian interests in Sri Lanka17.

When it comes to natural resources and their appropriation in countries with conflict issues and violations of human rights, you may easily accuse the role of China, as it is the case in Sudan. Well, we suggest that India, with a much lower profile, has very similar interests and very similar doing. China didn’t export wars, as the US did. We would like to broad the debate about conflict and natural resources also to India.

Stay tuned.

Sri Lanka:Oil and LTTE presence

Map of Sri Lanka.
In Blue the areas interested by oil exploration.
In Black areas previously under the control of LTTE.

11The Adivasi are the Indian aborigenes, Estimated in 80 millions.