Updated January 5th, 2024 at 16:36 IST
India, Guyana strengthen ties with hydrocarbon sector cooperation MoU
The collaboration is expected to diversify the source of crude oil, contributing to the energy security of both nations.
The Union Cabinet, chaired by Prime Minister Narendra Modi, has given the green light for the signing of a Memorandum of Understanding (MoU) between the Ministry of Petroleum and Natural Gas, Government of India, and the Ministry of Natural Resources, Republic of Guyana. The collaboration is set to focus on various aspects of the hydrocarbon sector, aiming to foster bilateral trade, investment, and enhance the energy and supply security of both nations.
Details of MoU
The proposed MoU encompasses the entire value chain of the hydrocarbon sector, including sourcing crude oil from Guyana, Indian company participation in Exploration and Production (EandP) ventures in Guyana, cooperation in crude oil refining, capacity building, strengthening bilateral trade, collaboration in the natural gas sector, and developing regulatory policy frameworks in Guyana's oil and gas sector. Additionally, it will extend to cooperation in the clean energy sector, encompassing biofuels, renewables, and solar energy.
The collaboration is expected to diversify the source of crude oil, contributing to the energy security of both nations. The MoU will open avenues for Indian companies to participate in Guyana's EandP sector, providing valuable experience in global oil and gas projects. This aligns with India's vision of fostering an "Aatmanirbhar Bharat" or self-reliant India.
Implementation strategy and targets
The MoU is set to be in force for an initial period of five years, with automatic renewal on a quinquennium basis unless either party provides a written notice three months in advance to terminate the understanding.
Guyana has recently emerged as a significant player in the oil and gas sector, making it the world's newest oil producer. The country's substantial oil and gas discoveries account for a considerable share of global findings. With India being one of the world's largest energy consumers, consumers of oil, and refiners, the partnership aims to fulfill India's growing energy needs and enhance strategic maneuverability by diversifying crude oil sources.
This strategic collaboration underscores the commitment to ensuring energy access, availability, and affordability, reinforcing India's focus on establishing new partnerships in the hydrocarbon sector.
Published January 5th, 2024 at 16:36 IST