Even as India and Guyana continue to explore ways in which they can increase their trade ties in areas that include oil and gas, it has emerged that India sourced as much as US$149 million in crude oil from Guyana between 2021 and 2022.
This growth in hydrocarbon trade between the two countries was described as an all-time high by India’s Union Minister for Housing & Urban Affairs & Minister for Petroleum and Natural Gas, Hardeep Singh Puri.
In a social media statement following talks a few days ago with Guyana’s Minister of Natural Resources, Vickram Bharrat, who was present in India for the India Energy Week in Quitol, Goa, Puri noted that they discussed ways in which they could further expand and cement ties between the two countries.
“In a very productive discussion with HE Vickram Bharrat, Minister for Natural Resources, Guyana, we discussed how India will be the demand centre for oil in the coming decades accounting for about 25 per cent of global energy demand growth between 2020-2040, presenting significant opportunities for collaboration between India and Guyana,” the Indian Minister said.
“Hydrocarbon trade between our countries witnessed a phenomenal growth in 2021-22 reaching an all-time high of USD 149 million with the start of crude oil sourcing from Guyana by Indian refiners. We discussed ways to build on this to further expand and cement our ties to cover other aspects of the energy sector, including power plants, infrastructure and capacity building,” he added.
India is already expected to partner with Guyana in critical areas in the oil and gas sector, including refining crude oil, as the Prime Minister Narendra Modi-led Indian Government approved the signing of a Memorandum of Understanding (MoU) between the two nations last month.
According to a statement from the Indian Bureau of Information, the Indian Cabinet approved the signing of an MoU between the Indian Ministries of Petroleum and Natural Gas and Guyana’s Ministry of Natural Resources, which will last for five years.
This MoU would see India sourcing crude from Guyana, an arrangement that it had previously utilised such as in 2021 when HPCL-Mittal Energy Ltd (HMEL), a joint venture between State-run Hindustan Petroleum Corp and Indian steel tycoon LN Mittal, bought Guyana’s crude.
It was also announced in January last year that India, where President Dr Irfaan Ali had led a delegation of Guyanese earlier that month, had made an initial proposal on the direct long-term purchase of crude. At the time, it had been announced that Guyana was examining the proposal at a technical level.
The Union Cabinet chaired by Prime Minister Modi approved the signing of an MoU between the Ministry of Petroleum & Natural Gas, Government of India and the Ministry of Natural Resources, Republic of Guyana on cooperation in the hydrocarbon sector.
Another area the MoU covers is cooperation with Guyana for crude oil refining. Additionally, it will create opportunities for Indian companies to explore and produce oil in Guyana and for collaboration on natural gas.
At the governmental level, the MoU allows for capacity building, strengthening bilateral trade, collaborating to develop oil and gas-related regulations and cooperation on renewable and clean energy, including biofuels and solar energy.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. The oil-rich Stabroek Block is 6.6 million acres (26,800 square kilometres).
Exxon, through its local subsidiary Esso Exploration and Production Guyana Limited (EEPGL), is the operator and holds 45 per cent interest in the Block. Hess Guyana Exploration Ltd holds 30 per cent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.