China And India: A Rage For Oil

American attention has lately been focused on China's emergence as a competitor for dwindling oil supplies -- witness the uproar over CNOOC Ltd.'s failed bid for California's Unocal Corp. But a different, yet equally intense, energy rivalry sure to have a dramatic effect on geopolitics has been playing out on the far side of the globe. Asia's other emerging powerhouse, India, is just as hungry for supplies as China. The two are battling each other in oil patches from Sudan to Siberia as they try to secure the resources to fuel their growing economies. So far, the Chinese have the upper hand in the competition.

The latest skirmish came on Aug. 22, when the board of PetroKazakhstan Inc., a Canadian-owned company with oil fields in Central Asia, accepted a $4.2 billion takeover bid by state-owned China National Petroleum Corp. CNPC beat a $3.6 billion offer from India's own state-owned giant, Oil & Natural Gas Corp. ONGC has said it may make a counteroffer, but the competition has already pushed the price into the stratosphere. CNPC's bid was a 21.1% premium on the price of PetroKazakhstan's shares. And it values the company's proven reserves at $10.26 per barrel -- 20% more than the market valuation of CNPC's own reserves, according to United Financial Group, a Moscow investment bank.