The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the signing of a Memorandum of Understanding (MoU) between the Ministry of Petroleum and Natural Gas, India and the Ministry of Natural Resources, Guyana, on cooperation in the hydrocarbon sector.
According to an official release, the proposed agreement covers the complete value chain of hydrocarbon sector including the sourcing of crude oil from Guyana, the participation of Indian companies in Exploration and Production (E&P) sector of Guyana, cooperation in the areas of crude oil refining, capacity building, strengthening bilateral trade, collaboration in natural gas sector, collaboration in developing regulatory policy frameworks in oil and gas sector in Guyana.
Also, it will include cooperation in the area of clean energy, including biofuels as well as the renewables sector, including solar energy.
The MoU with Guyana will strengthen bilateral trade, foster investment in each other countries and help diversify the source of crude oil, thus augmenting the energy and supply security of the country.
The agreement shall enter into force on the date of its signature, remain in force for a period of five years and be automatically renewed thereafter on a quinquennium basis unless either party gives the other party written notice three months in advance of its intention to terminate this understanding.
In recent times, Guyana has gained significant salience in the oil and gas sector, becoming the world’s newest oil producer.
The new discoveries of 11.2 billion barrels of oil equivalent amount to 18 per cent of total global oil and gas discoveries and 32 per cent of discovered oil.
As per OPEC World Oil Outlook 2022, Guyana is projected to see a significant ramp-up in production, with liquids supply growing from 0.1 million barrel per day in 2021 to 0.9 mb/d in 2027.
Further, as per the BP Statistical Review of World Energy 2022, India is the world’s 3rd largest energy consumer, the 3rd largest consumer of oil the 4th largest refiner and the fastest-growing major economy with rising energy needs.
The BP Energy Outlook and International Energy Agency estimate that India’s energy demand would grow at about 3 per cent per annum till 2040, compared to the global rate of 1 per cent. 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 giving further impetus to ensure energy access, availability, and affordability to citizens underpinned by energy security of the country, India is focusing on fostering new partnerships in the hydrocarbon sector, both through diversification of crude oil sources and through the acquisition of quality overseas assets. (ANI)