New Delhi: Guyana in recent times has gained significant salience 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% of total global discoveries of oil and gas and 32% of discovered oil. As per OPEC World Oil Outlook 2022, Guyana is projected to see a significant ramp-up in production, with liquids supply growing from 0.1 mb/d in 2021 to 0.9 mb/d in 2027.
Noting the significance of Guyana and given the renewed momentum of the bilateral relationship in the hydrocarbon sector, India has proposed to enter into a Memorandum of Understanding with Guyana on cooperation in the hydrocarbon sector.
To leverage Guyana’s hydrocarbon sector and provide an opportunity for Indian companies to participate in the Exploration and Production (E&P) sector of Guyana, the Union Cabinet today approved the signing of a Memorandum of Understanding 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. According to a Cabinet note, Indian companies will also gain experience by working with global oil & gas companies in upstream projects, thus fostering the vision of “Aatmanirbhar Bharat” (Self-reliant India).
The proposed MoU covers the complete value chain of the hydrocarbon sector including sourcing of crude oil from Guyana, participation of Indian companies in the Exploration and Production (E&P) sector of Guyana, cooperation in the areas of crude oil refining, capacity building, strengthening bilateral trade, collaboration in the natural gas sector, collaboration in developing regulatory policy framework in oil & gas sector in Guyana; Cooperation in the area of clean energy including biofuels as well as renewables sector including solar energy.
As per BP Statistical Review of World Energy 2022, India is the world’s 3rd largest energy consumer, 3rd largest consumer of oil, the 4th largest refiner and the fastest-growing major economy with rising energy needs. BP Energy Outlook and the International Energy Agency estimate that India’s energy demand will grow at about 3% per annum till 2040, compared to the global rate of 1%. Further, India is likely to account for approximately 25-28 per cent of the global energy demand growth between 2020-2040.
Intending to give further impetus to ensure energy access, availability, and affordability to citizens underpinned by the energy security of the country, India is focusing on fostering new partnerships in the hydrocarbon sector, both through diversification of crude oil sources and through acquiring quality overseas assets. This dilutes dependencies on a single geographical/economic unit and increases India’s strategic manoeuvrability.
The MoU on cooperation in the hydrocarbon sector with Guyana will strengthen bilateral trade, foster investment in each other countries and help diversify sources of crude oil, thus augmenting the energy and supply security of the country, a Cabinet note stated.
The MoU would enter into force on the date of its signature and will remain in force for a period of five years and would be automatically renewed thereafter on a quinquennium basis unless either Party gives the other Party a written notice three months in advance of its intention to terminate this Understanding.
– global bihari bureau
