As the country prepares to sell off its first lift of crude sometime this month, India has renewed its interest in not only buying oil from Guyana but also exploration offshore here.
In a recent interview with Times International, Indian High Commissioner to Guyana Dr KJ Srinivasa said his country’s energy needs is massive.
“India is an energy-hungry nation and 85 per cent of our petroleum requirements are imported. So we would love to work with the Government of Guyana to import oil, if possible, from Guyana on a long term basis,” he stated.
Only Friday, Head of the Department of Energy, Dr Mark Bynoe revealed that Guyana’s first lift of its share of crude from Liza Phase-1 Development will be shipped sometime this month. It was announced back in December that Shell Western Supply and Trading, which is Barbados’ branch for Shell International, will be buying Guyana’s first three oil lifts.
Guyana has adopted a two-phase approach to lifting and marketing its crude. While the first phase is a direct sale process, the second will be an open market Request for Proposals (RFP) to be launched early 2020 for a marketing agent to market Guyana’s crude entitlements from the Liza 1 field on a term basis.
According to the Indian Diplomat, there have not been any formal indications on India’s behalf to buy Guyana’s oil. But he stressed that this is something still on the cards.
“We are open to all possibilities because this is an event that is in progress. So as and when Guyana reaches its full capacity, I think they will also be searching for people who can buy that oil and India would try then to work out a deal which is favourable to both countries,” Dr Srinivasa stated.
This issue of India potentially buying oil from Guyana was first raised back in February 2018 when a high-level ministerial delegation travelled to the Asian country. During that visit, the Guyanese delegation which included Natural Resources Minister Raphael Trotman met with India’s Minister of Petroleum and Natural Gas, Dharmendra Pradhan.
High Commissioner Srinivasa had previously told this newspaper that Indian companies such as Hindustan Petroleum Corporation Limited (HPCL), Bharrat Petroleum Corporation (BPCL) and Oil and Natural Gas Corporation (ONGC) – all State-owned companies – would be interested in buying crude from Guyana in the future.
He had explained that his country’s refineries are geared towards refining and processing the oil from across the world. India’s primary source for oil is the Gulf region, and up to recently, Venezuela.
However, the Asian powerhouse also has oil stakes in many territories spanning the globe from Russia, Siberia, to Central Asia and even South American.
“In 2018, your Natural Resources Minister was in India and he held discussions with our Minister and our Minister was quite frank because he said India has great experience in exploration and exporting of oil. We already have oil blocks in collaboration in Siberia, Brazil etc so we have the necessary experience and expertise so we would be ready to collaborate when the new blocks open,” Dr Srinivasa told this publication recently.
In February 2019, Guyana’s Energy Director had said the country will be moving to have its first open bid round for oil blocks in the first quarter of this year. Dr Bynoe had explained that they created a new production sharing agreement (PSA) template, which will be used to guide future oil contracts.
However, he noted that the template would not be a one-size-fits-all given the varying exploration conditions but will ensure the best deal for both the country and investor.
“This is going to be used in new licencing rounds going forward. Let me emphasise, it’s a template, meaning that we will have varying conditions depending on how we are engaging… It will always be a balancing act on what Guyana wants and how Guyana perceives to get what Guyana wants” Bynoe had stated.
India’s Petroleum and Natural Gas Minister had stated on his twitter handle in February 2018 that the high-level meeting with the Guyanese ministerial delegation was useful, since they “discussed the possibilities of E&P (Exploration & Production) activities by Indian companies in Guyana”.
Another issue that came out of that meeting was India agreeing to work with Guyana and share its experience in the oil and gas sector – an offer which it’s High Commissioner said still stands.
“In the meantime, if Guyana needs any help in expertise development we’d be very happy to deal with that… We’re offering to the Government of Guyana that we can train the oil experts of Guyana because we have big public sector enterprises in India who are dealing with oil, both upstream and downstream, so we can really help to collaborate and participate in this whole venture,” Dr Srinivasa reiterated.
