Guyana’s Vice President, Bharrat Jagdeo, said the government may enter a long-term oil supply deal if there is oversupply in the market.
The South American government recently reiterated its no interest in an offer from India to buy its crude long-term. Officials say they prefer the competitive rates Guyana gets from marketing its crude publicly.
Guyana hosted Indian Prime Minister Narendra Modi during the period November 19-21. The two governments signed several memoranda of understanding (MoU) for cooperation in hydrocarbons, health, banking and agriculture.
Facing questions about India’s offer to buy Guyana’s crude, Jagdeo said, “We have not discussed any element of direct transaction for the sale of our crude to India.”
Given the distance it would take for the crude to travel, Jagdeo affirmed that there would need to be larger lifts. “For it to be economic, they had to have larger size lifts and also because of the higher price they had to pay for freight,” he said.
Currently, lifts from production offshore Guyana are taken in volumes of one million barrels. However, Demerara Waves reported, based on comments from Minister of Natural Resources Vickram Bharrat, that a deal with India could see very large crude carriers (VLCC) taking lifts of two million barrels. Jagdeo said though that any such deal would not happen soon, as Guyana has already hired marketers for its crude on a year-long contract through November 2025.
“There’d be a time maybe when, if there is an oversupply of the market, we may have to go to long term contracts but that’s not…the time is not now,” the Vice President said.
India is expecting that increased production would increase the likelihood and feasibility of a long-term oil supply deal with Guyana. “I would expect that as the volumes available to the Guyanese side in terms of crude and gas availability rise, they would be in a position to enter into longer term contracts because those are things that will help us to offtake larger volumes in a more predictable way, and make our transportation of such large volumes also economically feasible,” Jaideep Mazumdar, Secretary East in the Ministry of External Affairs of India, said during a November 21 press conference in Georgetown.
ExxonMobil is the operator of the Stabroek Block were all the oil production is taking place offshore Guyana. This currently stands at 660,000 barrels per day (b/d). This is expected to nearly double by 2027.