India and Guyana Agreement on Hydrocarbon Approved

  • Approved by the Union Cabinet chaired by the Prime Minister, Mr Narendra Modi.
  • Memorandum of Understanding (MoU) between the Ministry of Petroleum & Natural Gas, India and the Ministry of Natural Resources, Guyana on cooperation in the hydrocarbon sector.

Details Of The MoU:

  • Sourcing of crude oil from Guyana.
  • Participation of Indian companies in the Exploration and Production (E&P) sector of Guyana.
  • Cooperation in the areas of crude Oil refining.
  • Capacity building, and strengthening bilateral trade.
  • Collaboration in the natural gas sector.
  • Collaboration in developing regulatory policy framework in the oil & gas sector in Guyana.
  • Cooperation in the area of clean energy including biofuels and renewables sector including solar energy.

Benefits:

  • Will strengthen bilateral trade.
  • Foster investment.
  • Help diversify sources of crude oil and augment energy & supply security
  • Provide opportunities to Indian companies to participate in the E&P sector of Guyana.
  • Gain experience by working with global oil & gas companies in upstream projects.

Background:

  • Guyana has become the world’s newest oil producer.
  • Discoveries of 11.2 billion barrels of oil equivalent, amount to 18% of total global Oil & Gas discoveries and 32% of discovered oil.
  • As per OPEC World Oil Outlook 2022, Guyana is projected to see a significant ramp-up in production, with supply growing from 0.1 mb/d (Million barrels per day) in 2021 to 0.9 mb/d in 2027.
  • As per BP Statistical Review of World Energy 2022, India is the world’s 3rd largest energy consumer, 3rd largest consumer of, 4th largest refiner and the fastest-growing major economy with rising energy needs.
  • BP Energy Outlook and the International Energy Agency estimate that India’s energy demand will grow at about 3% per annum till 2040, compared to the global rate of 1%.
  • India is likely to account for approximately 25-28 per cent of the global energy demand growth between 2020-2040.
  • India is focusing on fostering new partnerships in the hydrocarbon sector, both through diversification of crude oil sources and through acquiring quality overseas assets.
  • This dilutes dependencies on a single geographical/economic unit and increases India’s strategic maneuverability.
Posted in Current Affairs.