Guyana not ready for exclusive long-term crude oil sales to India

Last Updated on Wednesday, 20 November 2024, 20:56 by Writer

India continues to be interested in a long-term agreement to buy Guyana’s crude oil of 2 million barrels per lift, but Natural Resources Minister Vickram Bharrat said government was sticking to its position that sales must be done competitively.

Mr Bharrat also said ExxonMobil, the operator in the Stabroek Block, would have to be consulted about arrangements to accommodate Very Large Crude Carriers (VLCC) to load the 2 million barrels of crude for the long-haul journey to India. “We know Exxon has to do some amount of changes to their lifting schedule and logistics because their preference is for the VLCC vessel that can accommodate 2 million barrels mainly because of distance and cost,” he told reporters.

He said Guyana’s position has not changed on the issue of not wanting to be locked into one buyer. If Guyana were to enter into such an agreement, he said that would not affect Guyana’s crude entitlement under the 2016 Production Sharing Agreement. Guyana currently sells 1 million barrels per lift.

India’s Secretary at the Ministry of External Affairs, Jaideep Mazumdar said his government was not disappointed about Guyana’s decision not to agree to a long-term oil sales agreement at this stage, but referred to key benefits of such an arrangement. “Greater predictability: for example even in the 0fftake of crude, we need large quantities and if we were to know well in advance the quantities are available, the contracts would be much more easy to conclude and also the transportation is another aspect because it is a very long way away so the use of VLCC carriers will be more predictable,” he said.

Asked whether Guyana would get a fixed price or Brent price under long-term contract, he said that would depend on negotiations. “We would like to have a more direct G-to-G (government-to-government) kind of relationship but it is for Guyana to decide how they wish to proceed,” said Mr Mazumdar who is part of India’s Prime Minister, Narendra Modi’s delegation on the November 19 to 21 visit to Guyana.

A joint statement on the engagements by Mr Modi and President Irfaan Ali said they agreed to the strengthening of bilateral hydrocarbon trade and cooperation in petroleum products” among other areas in the natural resources sector.

The Guyana Natural Resources Minister said while the South American nation was not ready to tie up its long-term oil sales in an agreement with India, that Asia country has been providing “a lot of technical assistance” especially through the Indian Oil Company.