India Views Guyana as Key Energy Partner

India Views Guyana as Key Energy Partner

Indian Prime Minister Narendra Modi has emphasized Guyana’s significance as a cornerstone of India’s energy security strategy during a recent visit to the South American nation. Addressing a special parliamentary session, Modi expressed his intention to foster Indian business investment in Guyana’s burgeoning energy sector.

India’s Interest in Guyana’s Oil Reserves

A day prior to Modi’s address, India’s foreign minister, Jaideep Mazumdar, had conveyed India’s keenness to acquire up to two million barrels of crude from Guyana. The discovery of extensive oil and gas reserves off Guyana’s coast almost a decade ago has made it an attractive prospect for nations seeking to secure their energy supply.

Guyana’s Production and Future Prospects

Currently, Guyana extracts approximately 650,000 barrels of sweet, light crude oil per day from three operational oil fields. Projections indicate that production will surge to over one million barrels daily in the coming years, bolstered by the commencement of operations in three additional oil fields within the next three years.

Challenges in Long-Term Oil Sale Deal

Despite India’s eagerness to secure a long-term oil sale agreement with Guyana, a memorandum of understanding (MOU) was inked instead to strengthen collaboration in hydrocarbon trade and petroleum products. Guyana’s Natural Resources Minister, Vickram Bharrat, acknowledged Guyana’s willingness to meet India’s crude requirements. However, he highlighted that such an arrangement would require ExxonMobil’s consent, as the company serves as the primary offshore oil production operator in Guyana.

ExxonMobil’s Role and Guyana’s Preference

Bharrat indicated that ExxonMobil would need to modify its lifting schedule and logistics to accommodate India’s request. The company typically utilizes very large vessels to transport crude, due to the significant distance and associated costs. Bharrat also stated that Guyana favors Indian companies bidding for oil blocks, and negotiations could ensue if such bids are submitted.