Guyana is set to sign a memorandum of understanding (MoU) with India, initiating a potential pathway for India to diversify its oil imports by considering the purchase of crude from the South American country. This development follows a recent approval by the Indian Cabinet, which greenlit the proposed MoU between the two nations.
The discussions for a bilateral oil agreement have been ongoing for over two years, marking a key step for India, which has a long-standing interest in Guyana’s oil. Guyana’s oil production has been expanding every year, with multiple developments being brought online by ExxonMobil. While production is currently at 550,000 barrels per day, Exxon plans to achieve 1.2 million barrels per day by 2027. Guyana’s stance on the sale of its crude has been cautious, prioritizing competitive selling rather than direct sales to specific countries or companies. This approach aims to ensure optimal financial returns.
Vice President Bharrat Jagdeo has previously stated that any agreement allowing India to purchase Guyana’s crude would be contingent on competitive and market-driven conditions. This statement was reiterated following a report by Reuters, which prompted inquiries to him about the potential MoU with India.
“Any sale of our oil to India would have… to be commercially beneficial to Guyana. So, it’s an MoU to cooperate in this area, to explore the possibility of sales directly to India, but it has to be on commercial terms. But there is no specific volume or timeline for any such agreement in the MoU,” the Guyana official stated.
According to Reuters, the MoU, once signed, would span an initial period of five years, with an option for automatic renewal, subject to mutual agreement between Guyana and India. The focus of this MoU is not just on the sale of crude but also on exploring broader cooperation in the oil sector.