— reports the Business Standard

THE government-owned Indian Oil Corporation Limited (IOC) is set to buy a consignment of Guyana’s crude oil from production offshore in the Stabroek block, according to reports by the Business Standard, a daily Indian newspaper. “According to oil ministry officials, this deal is at competitive rates and is in line with the strategy to have multiple sources of crude oil for Indian refiners,” the Business Standard reported recently, adding that this deal with Guyana is being made in an effort to diversify the sources of India’s imported crude oil. Indian High Commissioner to Guyana, Dr. K. J. Srinivasa, when contacted by the Guyana Chronicle on Sunday declined to comment on ongoing matters of interest between India and Guyana. “India continues to engage various partners across the globe on potential crude oil imports in an effort to diversify its sources. We will issue a press release at an appropriate time”.

In March, however, the first shipment of oil departed Guyana for India after the cargo was purchased by HPCL-Mittal Energy Ltd, a joint venture between state-run Hindustan Petroleum Corp and steel tycoon L.N. Mittal, according to a Reuters report. The cargo departed from a production facility offshore in the Sea Garnet vessel chartered by trading firm Trafigura, data from Refinitiv Eikon showed. And, it was reported that this shipment arrived in the South Asian country on April 8. Minister of Natural Resources, Vickram Bharrat, in March, told Reuters that the crude on board the Sea Garnet had been originally allocated to New York-based Hess Corp, one of the companies producing crude in Guyana along with ExxonMobil, and delivered to Trafigura. It was reported that Bharrat did not know the identity of the cargo’s ultimate buyer.

Previously, however, the high commissioner told this newspaper that the Government of India is willing to purchase Guyana’s share of oil lifts at the market value, annually, and on a long-term basis, through a government-to-government agreement, since the country is a mass importer of oil. According to Reuters, the country is the world’s third largest crude importer. The high commissioner had noted, also, that Indian companies such as Hindustan Petroleum Corporation Limited (HPCL), Bharrat Petroleum Corporation (BPCL) and Oil and Natural Gas Corporation (ONGC) – all State-owned companies – would be interested in buying crude from Guyana in the future.

India’s interest in diversifying its oil imports is influenced by the country’s efforts to reduce its dependency on the Middle East, according to additional reports from Reuters. “India, the world’s third biggest oil importer and consumer, imports about 84 per cent of its overall crude needs with over 60 per cent of that coming from Middle Eastern countries, which are typically cheaper than those from the West,” a Reuters report highlighted. Over the past few months, however, Reuters reported that India has been importing less oil from these countries and has been engaging other countries for potential oil purchase.

During an interview with the Guyana Chronicle in March, India’s High Commissioner noted that Guyana and India were still negotiating the oil-procurement deal. In March, also, in another section of the local media, Minister Bharrat, confirmed that the Indian Government is currently in talks with Guyana for the purchase of crude for short-term oil contracts in order to offset its earlier high-priced, long-term contracts entered into. While that request was made, the minister noted that a decision is still to be taken.

India has also signalled its willingness to help Guyana develop its gas-to-shore project, once that project is finalised. The high commissioner recently noted that assistance can be provided to use the gas for energy purposes, use it as fertiliser or to bottle the gas as Liquefied petroleum gas (LPG). Importantly, Dr. Srinivasa had told this newspaper: “If you want to set up a processing plant here, we will help you set that up… but if they have excess gas to market, yes, of course we will talk to them once we know what is the quantity and what is going to happen, because we don’t know anything right now.”