As the Prosperity floating production, storage and offloading (FPSO) vessel gears for start-up in Guyana’s Stabroek Block this year, it could see the country entering its first government-to-government oil deal.
The Prosperity will be the third production vessel for Guyana for its third development – Payara. Constructed by Dutch floater specialist, SBM Offshore, the vessel will produce at nameplate capacity of around 220,000 barrels of oil per day from a reserve base of 600 million barrels of oil equivalent.
First oil from the Prosperity FPSO is on schedule for 2023.
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Earlier this month, Guyana’s President, Dr. Mohamed Irfaan Ali met with India’s Minister of Petroleum and Natural Gas, Hardeep Singh Puri to discuss a direct oil partnership.
A long-term agreement is now being explored which spans increased long-term offtake, participation in exploration and production activities in Guyana, technical cooperation in the midstream and downstream sectors and capacity building.
Guyana’s Vice President, Dr Bharrat Jagdeo is set to head to India to review the proposal being put forward.
This potential deal has been sought by India for some time, and the Guyana government has been hesitant in the past. In 2021, the Minister of Natural Resources, Vickram Bharrat said Guyana was “not interested” in direct deals for the sale of its crude, and favoured the open tender process.
But this could change. Because of Russia’s war on Ukraine which has sent countries into a scramble to find alternative sources of oil and gas, entering into a long-term oil sales agreement would be especially advantageous for India. As the global energy market undergoes a deep restructuring, Guyana’s production ramp-up has emerged as a beacon.
“India has always expressed interest in buying oil from Guyana… [they had] even sent proposals before,” President Ali said at his last press engagement earlier this month. “We even had a lift that went to India so this is nothing new. India has made it very clear that they have an interest in being one of the purchasers of Guyana’s oil.”
