India preparing groundwork for long-term oil purchases from Guyana

Last Updated on Wednesday, 19 April 2023, 22:26 by Denis Chabrol

India and Guyana are preparing to hold commercial negotiations that could that Asian giant securing a long-term contract to buy crude oil from this South American nation, the top Indian envoy here said ahead of its Foreign Minister Dr. Subrahmanyam Jaishankar’s  visit to Guyana from April 20-23.

“We are an energy hungry nation so we need to work with Guyana because it’s a mutually beneficial thing. Guyana will get a direct buyer for the long term without the need for an intermediary,” High Commissioner to Guyana Dr SK Srinivasa told a news conference.  He said India was not seeking discount prices but would buy at Brent rates.

With a population of 1.4 billion people and the need to buy more oil to supplement its domestic production, he said India was interested in the light sweet crude from the Liza fields “because it’s very good for our refineries.”

Concerning India’s plans to buy more oil from Guyana, he said a bilateral technical group that was established after President Irfaan Ali’s visit to Guyana has held two meetings so far and “they are working on the modalities of how to take this forward” through commercial negotiations.  “We don’t have a concrete answer right now but we are working on it as we speak,” he said

The Indian High Commissioner urged Guyana to explore the possibility of tapping into Indian expertise to do active blending of crude oil with ethanol that could be produced from Guyana’s sugarcane. “Producing ethanol, a part from the sugar, is such a profitable business in India that most of the sugar companies are having profit only because of ethanol so that is something that we’ll be willing to work with the Guyanese government,” he said.

Though Dr Srinivasa was unsure whether an agreement would be approved by both sides in time for signing during the Foreign Minister’s visit. He said talks and the proposed accord would not be limited to oil and gas but would also include renewable energy.

The Indian High Commissioner said that during  Dr Jaishankar’s visit, an Air Services Agreement would be signed to allow for, among other things, code-sharing to promote air travel.

Agreements for the production of millet in Guyana and trade through the Federation of Indian Chambers of Commerce would be linking up with the Private Sector Commission are expected to be signed. The Guyana Office for Investment and an Indian medical Business Processing Outsourcing (BPO) company are due to sign an agreement that would see the creation of 120 jobs in the next few weeks.

While in Guyana, he will hold talks with several government ministers, co-chair the India-Guyana Joint Commission with his local counterpart Hugh Todd on a gamut of issues, meet with the Caribbean Community’s Council for Foreign and Community Relations (COFCOR) and hold bilateral talks with a number of the regional foreign ministers.

Accompanying the Indian Foreign Minister would be a business delegation which would be led by the Confederation of Indian Industries that would be participating in a business roundtable with more than 80 top Guyanese companies. “These meetings will underly the growing interest on both sides for stronger trade and investment ties,” the Indian High Commissioner said.  Dr Jaishankar is also expected to engage the Indian diaspora and Indian Passport holders.

The talks would focus on agriculture, infrastructure, defence, health and pharmaceuticals, technology and innovation, energy including renewable energy, human resource and capacity building, Ayurveda and wellness. “We hope that this visit will bring to the fore issues between the two countries and we’ll find solutions to problems that exist for the benefit of the people of Guyana and India,” the Indian envoy added.

Also down on the Indian Foreign Minister’s schedule is a meeting with the Speaker of the National Assembly Manzoor Nadir on training and parliamentary exchanges.

Guyana and India established diplomatic relations in May 1966.