After Iran gas, U.S. tells India to back off Syrian oil

It's not just Iran the Bush administration wants India to keep away from when it comes to energy matters. Syria has also joined the list of countries Washington says India must not have any dealings with. In a demarche, the U.S. embassy in Delhi has asked the Indian government to reconsider its decision to invest in a major Syrian oil field in alliance with China.

28 January 2006
The Hindu

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U.S. tells India to back off Syria oil deal
Aide memoire handed over to Ministry

Siddharth Varadarajan

NEW DELHI: Taking strong exception to India's recent decision to buy a Syrian oilfield in partnership with China, the United States has asked the Manmohan Singh Government to "reconsider" its proposed investment.

A demarche to this effect was made earlier this month and an aide memoire outlining Washington's objections handed over to the Ministry of External Affairs by senior diplomats here. In December last, ONGC Videsh Ltd (OVL) and the China National Petroleum Corporation (CNPC) teamed up to purchase a 37 per cent stake in the al-Furat oil and gas fields from Petro-Canada for $573 million.

The mature fields, jointly run by Shell, have proven reserves of 300 million barrels of oil equivalent. Indian officials consider the Syrian venture to be of enormous strategic significance, both for the value of the underlying assets and the role it will play in cementing the China-India partnership for acquiring oil and gas equities in third countries.

The U.S. aide memoire, a copy of which is in the possession of The Hindu, says: "The United States strongly opposes such investments in Syrian resources."

Pointing out that the United Nations Security Council unanimously passed two resolutions, UNSCR 1636 and 1644, "mandating complete cooperation by the government of Syria with the U.N.'s investigation into the assassination of former Lebanese Prime Minister Rafiq Hariri," the U.S. note says: "Now is not the time to send mixed messages to the SARG [Syrian Arab Republic Government] either through investment deals or through any form of economic or political reward to the Damascus regime."

"Reconsider decision"

The U.S. is concerned that "the Syrian regime will seek to exploit news of any FDI at the moment as evidence that it is not isolated and therefore not comply with its UNSCR obligations." It adds bluntly: "We ask that you reconsider this decision to extend such a significant amount of investment in Syria".

It is not known whether the U.S. embassy in Beijing presented a similar note to the Chinese Government. Indian officials say the U.S. has been told that the Syrian investment will proceed as planned.

Coming on the heels of the Bush administration's opposition to gas imports from Iran, the demand is likely to intensify fears that Washington is leveraging its offer of civil nuclear cooperation to curb India's attempts to diversify its sources of energy.

"We are being told whom to do business with and where we should stay away from," a senior Indian official told The Hindu. "Today, it is Iran and Syria, tomorrow it may be Sudan or Myanmar or Venezuela or someplace else. At stake is not just our energy security but also our right to take decisions by ourselves."

The aide memoire says the U.S. encourages India "to send the Syrian Government a tough message that the international community — in which your nation plays a crucial and growing role — expects Syria to improve its behaviour before other states can resume normal dealings with it."

Conditions for Syria

Among the conditions the U.S. would like fulfilled before India gets involved in Syria are:

"Syria must cease its interference into Lebanese affairs, cooperate fully with UNIIC Mehlis's investigation [into Hariri's assassination], prevent the use of its territory by those supporting terrorism and the insurgency in Iraq, expel Palestinian rejectionist groups and take tangible steps to improve its domestic human rights record."

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