Q. Venezuelan oil minister Rafael Ramírez in late September met with his Indian counterpart, Veerappa Moily, to discuss strengthening energy relations, especially the oil trade, between the two nations. This month, PDVSA announced that it had signed nine agreements with Indian energy companies covering areas such as the oil trade, development of fields, construction of coal and gas-fired power plants and technological cooperation. What factors are driving energy relations between India and Venezuela, and with Latin America more generally? Where are the biggest opportunities for mutual cooperation? To what extent will India’s involvement in Latin American oil industries rival China’s?
A. Rengaraj Viswanathan, distinguished fellow at Gateway House (Indian Council on Global Relations) and former Indian ambassador to Argentina, Uruguay and Paraguay: “Since Chávez became president, Venezuela has been cultivating India as a long-term market for oil and also as a source of investment. This is good for Venezuela’s diversification of markets and partnership. And it is good for India too, which can count the country as a reliable supplier in the long run. But PDVSA ‘s attempt to collaborate in gas- and coalfired power plants is not realistic from either side. Technological cooperation is possible only to a limited extent, given the messy management of PDVSA. India needs to reduce dependence on the unstable Middle East and diversify its sources of crude and oil investment. Latin America with its surplus crude and opportunities for upstream investment fits in with India’s energy security strategy. India is already importing from Brazil, Mexico, Ecuador and Colombia. Indian companies have invested in oil fields in Brazil and Colombia. Crude oil is the largest import of India from Latin America.