Southeast Asia stands to gain if regional powerhouses India and China succeed in jointly securing long-term energy supplies to fuel their fast-growing economies, analysts said.
The two former rivals are now key trading partners of Southeast Asia and if they can work together to ensure their energy needs are met, it will mean a continuation of the sizzling growth that has benefited the region, they said.
"We in Southeast Asia would certainly like to see the continuous growth in China and India," said Rodolfo Severino, the former secretary-general of the 10-member Association of Southeast Asian Nations.
"If they are able to resolve their concerns over energy, then that means their rapid growth will continue, which is good for the region," he told AFP by telephone.
China and India plan to sign pacts in November aimed at teaming up to bid for oil and gas projects, the latest signal yet that ties are improving after a history of hostility which saw the neighbours fight a brief border war in 1962.
The two neighbours had been vying for scarce energy resources around the world with Beijing winning the latest bout when China National Petroleum Corp outbid India's Oil and Natural Gas Corp for Kazakhstan's third-largest oil producer, PetroKazakhstan.
Both countries are keen to ensure there is enough oil to power their rapidly growing economies. Demand from China and India is one of the reasons behind the sharp rise in crude prices over the last two years, according to oil dealers.
Co-operation between the two Asian giants in securing energy supplies can only be favourable for Southeast Asia, said Hugh White, a professor of strategic studies at the Australian National University in Canberra.
"Obviously for both countries, the search for energy security is going to be one of the key drivers for their strategic policies," White told AFP.
"If that search for energy security is mishandled, it could lead to significant insecurity and it is particularly important for Southeast Asia.
"It is the part of the world in which the spheres of interest of the two countries most naturally overlap and is also potentially a significant source of energy itself," he said, adding that Southeast Asia is also a crucial transit area for oil shipments.
The narrow 960-kilometre-long (600-mile) Malacca Strait in Southeast Asian waters is one of the world's busiest trading routes, used by about 50,000 ships a year carrying a third of global trade and half its oil supplies.
At least 75 percent of China's oil imports pass through the Malacca Strait before reaching Chinese shores and Beijing has been building up its naval forces to protect its oil supply routes, analysts said.
The Asian Development Bank said last month that China and India will carry the region's economic growth rates over the next two years.
It forecast gross domestic product (GDP) growth of 9.2 percent for China and 6.9 percent for India in 2005, boosting the average growth rate for Asia-Pacific developing economies this year to 6.6 percent.
However, the ADB cut its GDP forecast for Southeast Asia to 5.0 percent in 2005 due to poor harvests in the Philippines and Thailand, a cyclical downturn in the global electronics sector and higher oil prices.
According to White, it is better to have New Delhi and Beijing working together than competing, preventing "a competition for power and influence."
Last year, China overtook Japan as the world's second largest crude importer after the United States. It relies on imports for about 3.7 million barrels per day or 40 percent of its oil needs. India was the world's fifth largest petroleum consumer in 2004 and imports nearly 70 percent of its oil needs.
Last year, it consumed a little over two million barrels a day and a government paper has forecast that by 2025, the figure will rise to 7.4 million barrels a day.
While analysts agreed it was a wise move by China and India to work together to source for energy supplies, they cautioned against any high expectations because it's still early days.
"It will be unwise to assume that the co-operation will succeed or produce substantive results," said White from the Australian National University.
David Ernsberger, Asian editorial director with energy information provider Platts, said "Chinese companies are keen to bring oil and gas to China, while Indian companies are keen to bring these products to India, and it will be interesting to see how a quid pro quo is reached."