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Indian Govt. approves MoU to explore Guyana’s oil blocks
Kaieteur News – The Government of India has given its approval for a Memorandum of Understanding (MoU) to be signed with Guyana for collaboration in the hydrocarbon sector. In a statement that was issued by the Indian administration on Friday, it said the proposed MoU covers the sourcing of crude oil from Guyana, participation of Indian companies in the exploration and production sector of Guyana, and cooperation in the areas of crude oil refining and capacity building.
It also covers the strengthening of bilateral trade, collaboration in the natural gas sector and developing a regulatory policy framework in oil gas sector for Guyana. It is also expected to pave the way for cooperation in the area of clean energy including biofuels as well as the renewables sector.
The statement said the MoU shall enter into force on the date of its signature and will remain in force for a period of five years. It shall be automatically renewed thereafter on a five-year basis unless either party gives the other a written notice, three months in advance, of its intention to terminate the understanding.
President of Guyana, Dr. Irfaan Ali and Prime Minister of India, Shri Narendra Modi
In recent times, Guyana has gained significant salience in the oil and gas sector, becoming the world’s newest oil producer. The new discoveries in the Stabroek Block represent 11.2 billion barrels of oil equivalent and amounts to 18% of total global oil & gas discoveries and 32% of discovered oil.
According to the 2022 World Oil Outlook report by OPEC, it’s expected that Guyana’s oil production will increase substantially. The production is predicted to grow from 0.1 million barrels per day in 2021 to 0.9 million barrels per day by 2027.
OPEC, which stands for the Organization of the Petroleum Exporting Countries, is an international group consisting of several oil-producing countries. Its main purpose is to coordinate and unify the petroleum policies of its member countries and ensure the stabilization of oil markets.
Further, as per BP Statistical Review of World Energy 2022, it notes that India is the world’s third largest energy consumer, third largest consumer of oil, and the fourth largest refiner. It is also the fastest-growing major economy with rising energy needs. BP’s Energy Outlook and the International Energy Agency estimate that India’s energy demand would 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.
With a view to give a further impetus to ensure energy access, availability, affordability to citizen underpinned by energy security of the country, India is focusing on fostering new partnership in 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 increase India’s strategic maneuverability.
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