NEW DELHI, India, CMC – India Friday announced that it had approved signing a five-year memorandum of understanding (MoU) with Guyana for cooperation in the hydrocarbon sector, including sourcing crude oil.
“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,” according to a government statement.
It said that the MOU 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 power.
India, the world’s third-largest energy consumer, and importer, is looking to diversify its sources of oil imports, and the authorities say Guyana is one of the countries it is looking at.
The MoU, 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 the source of crude oil, thus augmenting the energy and supply security of the country,” it said.
It will also allow Indian companies to participate in Guyana’s exploration and production sector, gaining experience by working with global oil and gas companies in upstream projects, thus fostering the vision of ‘Aatmanirbhar Bharat.’
In recent times, Guyana has gained significant importance in the oil and gas sector, becoming the world’s newest oil producer. The discovery of 11.2 billion barrels of oil equivalent amounts to 18 percent of total global oil and gas discoveries and 32 percent of discovered oil.
According to the OPEC World Oil Outlook 2022, Guyana is projected to see a significant ramp-up in production, with liquid supply growing from 0.1 million barrels per day in 2021 to 0.9 million barrels per day in 2027.
India is regarded as the world’s third-largest energy consumer, the third-largest oil consumer, the fourth-largest refiner, and the fastest-growing major economy with rising energy needs.
“To give a further impetus to ensure energy access, availability, and affordability to citizens underpinned by the country’s energy security, India is focusing on fostering new partnerships in the hydrocarbon sector, both through diversification of crude oil sources and acquiring quality overseas assets. This dilutes dependencies on a single geographical/economic unit and increases India’s strategic maneuverability,” the statement said.
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