Indian companies interested in exploration, production in Guyana

Even as India pursues a long-term deal to buy Guyana’s light sweet crude oil, companies in the energy-hungry nation are also interested in exploration and production activities offshore Guyana.

This was indicated by Secretary (East) of India’s Ministry of External Affairs, Jaideep Mazumdar, on Thursday during a press briefing on Prime Minister Narendra Modi’s historic State Visit to Guyana.
According to Mazumdar, Guyana’s proven and estimated oil and gas reserves are very promising.
“We would be interested in participating in the exploration and production phase as well. Our oil companies are certainly looking at this and if they do get an opportunity, they would be willing to invest as we have invested in many countries of the world far from the shores of India,” the Indian official told reporters at the press conference.
In the past, Guyanese Government officials had stated that Indian companies were interested in acquiring stakes in Guyana’s budding petroleum sector through negotiations rather than the bidding process – a route that the Guyanese Government has opted to use in expanding offshore developments to promote transparency and accountability.
When it comes to a long-term oil purchase agreement, Mazumdar explained that it would be up to the Guyana Government to decide how this is done but he reiterated India’s preference for a government-to-government (G2G) arrangement.
“We would like to have [a] long-term commitment. We would like to have G2G commitments as well that bring in greater predictability but it’s really for the Government of Guyana to decide when they are comfortable doing this… I would expect that as the volumes available to the Guyanese side in terms of crude and gas availability rise, they would be in a position to enter into longer-term contracts because those are things that will help us to offtake larger volumes more predictably and make our transportation of such large volumes also economically feasible,” the Indian Secretary stated.
During high-level bilateral discussions on Wednesday at State House, the Guyana and Indian Governments signed a Memorandum of Understanding (MoU) for Cooperation in the Hydrocarbon Sector.
In a Joint Statement following those engagements between President Dr Irfaan along with his Cabinet Ministers and Prime Minister Modi along with his visiting delegation, it was explained that the two leaders emphasised the importance of energy cooperation in achieving sustainable development goals and committed to a fair and equitable energy transition.
It was noted that they agreed to the strengthening of bilateral hydrocarbon trade and cooperation in petroleum products, sharing of best practices, technology transfer, and investment in the gas-to-energy project, fertilizer production, mining collaboration deep-water port infrastructure, and clean energy initiatives.
During his remarks after those bilateral talks on Wednesday at State House, Prime Minister Modi highlighted the importance of Guyana’s oil and gas sector to India’s high-demand energy needs.
“Guyana will play an important role in India’s energy security,” a live English translation of PM Modi’s address, which was done in Hindi, stated.
Guyana currently has an estimated 11 billion barrels of oil equivalent in the prolific Stabroek Block, where United States oil major ExxonMobil along with its co-venturers has been producing oil since 2019. Exploration activities are also ongoing in other oil blocks offshore Guyana.
India, the world’s third-largest oil consumer and importer as well the one of the biggest oil refiners, has been looking to diversify its crude sources. Currently, the energy-hungry nation imports nearly 85 per cent to 90 per cent of its crude oil.
In fact, India has already bought some US$149 million of Guyana’s crude between 2021 and 2022 and has been seeking a multi-year deal. As a result, the Cabinet in New Delhi, back in January, had approved the signing of a five-year MoU with Guyana.
On the sidelines of Wednesday’s engagements, Secretary Mazumdar was asked by local reporters whether the Indian Government is disappointed that they were unable to secure an exclusive deal to buy Guyana’s crude.
“There are so many prospects for cooperation that we don’t really [need to] express any disappointment. The future is open. We have so many prospects for cooperation in this area… projects like hydrocarbon, like petroleum refinery projects, gasification projects and also capacity building of people from Guyana,” he pointed out.
According to Mazumdar, there was no discussion during Wednesday’s high-level engagement on why that exclusive deal was not approved.
Currently, ExxonMobil and its partners are operating three Floating Production Storage and Offloading (FPSO) vessels – Liza Desting, Liza Unity and Prosperity – in the oil-rich Stabroek Block, offshore Guyana.
The Guyana Government had estimated that the US oil major will produce some 228 million barrels of oil equivalent this year. Based on local reports, the Government has already received over US$2 billion in revenues to date from the sector with several hundred million more before the end of 2024. (G-8)