India was snubbed from 2021 to 203 in repeated offers to directly buy Guyana’s crude oil at market prices. Middle Eastern countries and other brokers marketed Guyana’s oil till now. But the Guyana government seemingly now have a change in position as India’s cabinet has agreed to purchase Guyana’s sweet crude.
India’s Prime Minister Narendra Modi and President Irfaan Ali
India’s Cabinet on Friday January 12 approved signing of a 5-year memorandum of understanding with Guyana for cooperation in the hydrocarbon sector including sourcing of crude oil, as reported in Guyana’s media and Business Standard.
“The proposed MoU covers the complete value chain of the hydrocarbon sector, including sourcing of crude oil from Guyana, participation of Indian companies in exploration and production (E&P) sector of Guyana, (and) cooperation in areas of crude oil refining,” a government statement said.
It also covers capacity building, strengthening bilateral trade, collaboration in the natural gas sector, collaboration in developing regulatory policy framework in the oil and gas sector in Guyana; cooperation in the area of clean energy including biofuels as well as renewables sector including solar energy.
India, the world’s third largest energy consumer and importer, is looking to diversify its sources of oil imports and the South American nation is one of the countries it is tapping for that. India has also signed agreement to purchase crude from Venezuela of over a million barrels daily.
The MoU regarding Guyana, which has been in discussion for more than two years, will be for an initial period of five years, with a provision for automatic renewable if the two countries agree, the statement said.
“The MoU on cooperation in the hydrocarbon sector with Guyana will strengthen bilateral trade, foster investment…and help diversify source of crude oil, thus augmenting the energy and supply security of the country,” the statement.
It will also provide opportunity to Indian companies to participate in the exploration and production sector of Guyana, gaining experience by working with global oil and gas companies in upstream projects, thus fostering the vision of ‘Aatmanirbhar Bharat’.