India and Guyana to Sign New Hydrocarbon Agreement

January 5, 2024 Hour: 3:46 pm

On Friday it was announced that India will sign a memorandum of understanding with Guyana on cooperation in hydrocarbons for the supply of crude oil and the participation of its companies in this sector in the Caribbean nation.

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According to an Indian Cabinet notification, the collaboration will extend to the areas of crude oil refining, capacity building and strengthening bilateral trade.

It will also cover the natural gas branch, the development of a regulatory policy framework in the oil and gas sector in Guyana, the area of clean energy, including biofuels, and in renewables, including solar, the official statement said.

For New Delhi, the agreement will strengthen bilateral trade, encourage investment between the two countries and help diversify sources with an impact on the country’s energy and supply security.

The MoU would further strengthen partnership between India and Guyana in energy sector with mutually beneficial cooperation in multiple sectors. pic.twitter.com/gkuIMdLxrM

— India in Guyana (@IndiainGuyana)
January 5, 2024

It will also provide an opportunity for an Indian company to participate in Guyana’s exploration and production sector, for the acquisition of expertise from global oil and gas companies.

The memorandum will remain active for a period of five years and will be renewed every five years until the parties decide to terminate it, according to the Indian government.

According to BP Statistical Review of World Energy 2022, India is the world’s third-largest consumer of energy and the third-largest consumer of oil.

Expert sources estimate that India’s energy demand will grow by approximately three percent annually through 2040, compared to the global rate of one percent.

Moreover, the South Asian nation is likely to account for 25 to 28 percent of global energy demand growth between 2020 and 2040, they note.

With a view to provide further impetus to ensure access, availability and affordability of energy for citizens, Indian authorities are focused on fostering new partnerships in the hydrocarbon sector by diversifying sources of supply and acquiring quality assets abroad, according to New Delhi.