India’s state owned Oil production industry is urging the government to create the country’s first sovereign wealth fund to compete with China in the race to secure global energy assets

Early stage discussions are said to be under way between India’s Oil and Fnance Ministries to set up a sovereign investment fund.

The plan, if adopted, would repudiate an initiative pushed by New Delhi in Y 2006 for India to join forces with China in bidding on global energy projects to keep costs down, no deadline has been set.

India’s oil ministry and state-owned energy groups have told the government that funds from the country’s US$278B of foreign exchange reserves would better equip them to compete with Chinese energy groups that have spent heavily to acquire offshore energy assets.

R?S?Sharma, chairman of India’s state-controlled Oil and Natural Gas Corp, said creation of a sovereign wealth fund would boost India’s ability to secure energy deals offshore. He said in a interview that, “[It] would be very good for India’s energy sector as it would help us expand our energy resources capacity. It would help us boost production and … meet the country’s energy needs.”

India currently imports about 75% of its Crude Cil requirements, according to Murli Deora, the country’s oil and gas minister. The south Asian country imports more than 2M bbls of Crude Oil per day and produces only 700,000 bpd at home.

Last year, Chinese companies spent more than US$30B buying up energy assets around the Globe with the backing of state financing, including the China Investment Corp, the country’s US$300B sovereign wealth fund.—Paul A. Ebeling, Jnr. www.livetradingnews.com

Posted by Shayne Heffernan on Mar 18th, 2010and filed underBRIC.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site