BOMBAY, 22 December 2005 — India and China, often fierce rivals in the race for global energy resources, have won a joint bid to buy Petro-Canada’s 37 percent stake in Syrian oil fields for $573 million, a top Indian official said yesterday.

The acquisition marked the first time the two Asian giants have bid together for overseas reserves to feed their oil-hungry economies and opened the way for further collaboration.

India’s Oil and Natural Gas Corp (ONGC) and China National Petroleum Corp. (CNPC), both state-owned, will have equal stakes in the Al Furat oil fields.

“This joint acquisition opens a wholly new set of opportunities for both the companies to collaborate on the oil and gas value chain,” ONGC Chairman Subir Raha said in a statement.

“The joint acquisition by ONGC and CNPC is a pace-setter for both companies, he said. The acquisition followed the countries’ announcement in April they would team up to bid for some energy projects as they seek to keep their economies booming although they said they would still compete for others.

In all, eight firms were in the race for Petro-Canada’s stake, The Press Trust of India said.

Calgary-based Petro-Canada said in a statement on its website that the deal was expected to close in early 2006, subject to Syrian government approval, and that the sale was in line with its strategy of disposing of “mature assets.” The company said “Syria remains an important part of our North Africa Near East producing region.”

Raha said ONGC, India’s largest corporation by market capitalization, would explore the possibilities of more such collaboration with the Chinese in the future but did not elaborate.”

China has been regularly outbidding its neighbor, most recently in August when India’s state-run Oil and Natural Gas Corp. lost out on Kazakhstan’s third-largest oil producer, Petrokazakhstan, also a Canadian firm.

“Such joint bids will reduce needless outbidding and the two countries can be strong buyers in the international oil market,” said an energy analyst with a leading Indian brokerage.

He said the deal will not significantly increase ONGC’s oil production, “but will give the Indian company better returns on investments considering the steady rise in oil prices.” “However I do not see many such collaborations between Indian and Chinese firms, though ONGC gains from such acquisitions as it has not been producing much oil locally.”

Shares of ONGC closed up 7.40 rupees or 0.64 percent to 1,160.20 on the Bombay Stock Exchange even as the benchmark Sensex slipped 0.08 percent or 7.07 points to close at 9,339.17.

India initiated the idea of jointly bidding for some projects. It imports nearly 70 percent of its oil needs while China relies on foreign producers for more than a third of its oil, analysts say.

Some analysts had been doubtful about whether a partnership between two neighbors who fought a border war in 1962 and have a history of suspicion and hostility can work. But the Indian government is keen to avoid cut-throat competition with Chinese oil firms.

“It’s an important milestone. We have been working on this for quite some time. Instead of competing wherever possible, we should work together,” Indian Petroleum Secretary S.C. Tripathi told the Press Trust of India.

ONGC and CNPC, one of the world’s leading integrated energy companies, are both stakeholders in an oil field in Sudan although they did not bid for it jointly.

The announcement came shortly before Indian Petroleum Minister Mani Shankar Aiyar’s visit to Beijing slated for January.

Aiyar is expected to be in China for about a week starting Jan, 10 to look for more collaboration between the two countries in the energy sector.

Teaming up would give Indian and Chinese more negotiating muscle as they buy up far-flung oil and gas fields, analysts say. Both countries have been scouting for oil blocks around the world to meet their surging energy demands.