Oil exploration and security

First it was telecom a couple of years ago and now it is oil and gas exploration. It looks like the Chinese

ghost will not go away. The Union Home Ministry has advised the Petroleum Ministry against considering Chinese firms for the award of exploration rights in oil and gas blocks due to “security reasons”. The on-land blocks in Rajasthan, Gujarat and Punjab proposed for auction are located close to the border with Pakistan where apparently China is engaged in different projects. The blocks in the northeast and offshore ones in the Mahanadi basin, says the Home Ministry, are “close to sensitive defence installations and strategic assets”. In its view, these blocks should therefore be given only to Indian public sector companies for exploration. The Home Ministry also wants its advice to be kept in mind while finalising sub-contracts for services such as equipment procurement, consultancy and maintenance. Truth to tell, it is not as if too many foreign companies are lining up to invest in the country’s oil and gas exploration sector, not to talk of Chinese ones. The auctioning of oil exploration blocks under the New Exploration Licensing Policy has attracted but tepid attention from foreign bidders in the last couple of rounds, and the story is likely to be the same in the upcoming one as well.

Yet, the bogey of threat from Chinese companies needs to be busted. For all its exertions in recent years, the government has not provided concrete evidence of any wrongdoing by Chinese companies in the telecom and IT sectors. Its warnings have been based on mere suspicion — which is not enough grounds to keep out a foreign investor, especially in these difficult times for the economy. On the other hand, it was Facebook, Google and Twitter, companies that are headquartered in what is supposed to be a friendly country, which were in the eye of a storm over sharing data from their servers, including that of Indians, with the U.S. National Security Agency. This proves companies from friendly countries are as capable of aiding espionage as those from not-so-friendly ones. And the answer is not to ban or show the door to all multinationals but to put in place protective systems to safeguard the country’s interests and assets. In the case of the oil blocks there is indeed a problem as these are located in strategic or sensitive parts of the country. Instead of trying to keep out companies from one country or the other, the government would do well to create a reporting and monitoring system that will enable security agencies to keep an eye on the activities of these companies, especially when it comes to blocks located close to defence installations. That is the way to handle security threats.