Saturday, August 13, 2022

Guyana not in favour of bilateral agreement with India for oil, prefers open process – Bharrat

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OilNOW
OilNOW is an online-based Information and Resource Centre

Even though there is great interest from India to have a long-term agreement for the purchase of Guyana’s Liza crude, the South American country’s government is not in favour of this approach says Natural Resources Minister, Vickram Bharrat. During an interview with OilNOW, Mr. Bharrat said the government prefers to have an open process, hence it recently issued a Request For Proposals (RFP) for a crude marketer.

He said, “Indeed there is great interest from India through the High Commissioner here Dr. K.J. Srinivasa. He has been in constant contact with us. He met with President, Irfaan Ali; the Vice President, Dr. Bharrat Jagdeo; and myself concerning a long-term arrangement to purchase Guyana’s share of crude. However, we are not really in favour of any bilateral agreement especially when it comes to the oil and gas sector.”

Mr. Bharrat added, “We prefer it to be a more open and transparent process. As a result of this, we have decided to go back with the RFP for crude marketing and that is already out.”

The natural resources minister said the government is in search of a company to market the country’s fourth oil lift for this year which is due the second or third week in September. He said another lift of 1 million barrels of oil is expected before year-end.

“We were pushing to have six lifts this year but there were (mechanical) issues with the Liza Destiny’s gas compressor system which hindered that. But of course, next year will be better because the Liza Unity will be in Guyana and it is almost double the capacity of the Liza Destiny,” he said.

OilNOW had reported that Guyana’s most recent sale of 1 million barrels of Liza crude was executed with Indian Oil Corporation Ltd. (IOC) and was hailed by Bharrat as the country’s “sweetest deal to date” since it is poised to bring in as much as US$76M. He said this would be the highest sale made to date of the seven lifts since no marketer’s fee was paid this time around.

It was also reported that IOC is the first Indian state refiner to buy Guyana’s oil. Private refiner HPCL-Mittal Energy Ltd, a joint venture between state-run Hindustan Petroleum Corp and steel tycoon L.N. Mittal, had bought a million barrels of Liza grade in March.

1 million barrels of Guyanese oil en route to India’s Paradip refinery

India, the world’s third biggest oil importer and consumer, ships in more than 80% of its oil needs from overseas and relies heavily on the Middle East. The nation’s gas demand is expected to increase nearly 3-fold from 229 million metric tonnes in 2018 to 607 million metric tonnes in 2040.

Earlier this year, India asked state refiners to expedite the diversification of crude sources after the Organization of Petroleum Exporting Countries (OPEC+) and its allies failed to ease supply curbs, leading to a spike in global oil prices.

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