Aiyar should think hard before chasing Kazakhstan

Vol 8, PW 17 (17 Nov 04) People & Policy

Oil minister Mani Shankar Aiyar would do well to reflect on ONGC Videshs unpleasant experience with Kazakhstan before getting too excited about the latest Kazakh offer.

In the last issue we reported how a returning Indian diplomat reported that Kazakh President Nursultan Nazarbayev is personally backing a renewed Indian bid for the Kurmangazy and Alibekmola oilfields. Impatient, Aiyar wants OVL and ministry officials to start work on Kazakhstan.

But before rushing in, Aiyar would do well to read up. Stakes in Kurmangazy and Alibekmola were first promised to India in 1995 during President Nazarbayevs visit to Delhi.

India immediately took up the offer and former OVL managing director Atul Chandra went to Kazakhstan to investigate. Once there, Chandra was asked to contact an American go-between for the data package.

This American demanded $100,000 in cash as payment for the data, a source tells us. Chandra refused and returned to India.

Not much moved till four years ago when former official Brajesh Mishra from the Prime Ministers Office (PMO) returned from Kazakhstan and reactivated the proposal. In 2002 the oil ministry moved a recommendation to the powerful Empowered Committee of Secretaries for OVL to buy a 10% stake in Kurmangazy and 15% in Alibekmola.

The PMO and MEA (Ministry of External Affairs) were keen and so was the Kazakh foreign ministry, we are told. The PMO was pushing the oil ministry very hard and felt that Chandra was not taking the opportunity seriously.

Chandra made another trip to Kazakhstan where one of President Nazarbayevs powerful sons-in-law plainly told him India would have to pay a bribe to secure the deal. When told a state-owned company like OVL could not account for such a payment, he suggested that (London-based steel baron) Lakshmi Mittal be brought in on the deal.

Fearing trouble, the Indian oil ministry rightly dropped the proposal.

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