Guyana would be open to exploring a proposal from fellow Caribbean Community (CARICOM) states for crude oil sales, even one that could link discounted barrels to cheaper refined fuel supplies, Vice President Bharrat Jagdeo said on Thursday.
Late last month, outgoing President of the African Export-Import Bank (Afreximbank) Benedict Oramah floated the idea of Guyana supplying its crude to the region. Speaking at the African-Caribbean Trade and Investment Forum in Grenada, Oramah urged Caribbean leaders to consider pooling demand for petroleum and negotiating with Guyana to refine and supply fuel collectively, which he said could dramatically lower prices.
Jagdeo told reporters there is currently no formal proposal from the 15-member regional bloc for Guyanese crude. “If and when it’s made, we will then examine it on its merit,” he said.
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In response to a question on whether Guyana would consider selling crude to CARICOM at a discounted rate, Jagdeo said the government is exploring similar arrangements with U.S. companies. “If there is a proposal where you may sell your crude at a particular price, but then get the benefit in refined products, then that is something we are exploring,” Jagdeo said.
Such deals would see Guyana receive refined fuels at a lower cost than current imports, reducing prices for Guyanese consumers.
“We’re open to exploring any option, but we’ll see it when it comes,” he said, adding that lowering fuel costs could also be achieved by procuring larger volumes and investing in storage facilities.
Guyana became the world’s fastest-growing oil producer due to investments by an ExxonMobil-led group, and currently sells its government-entitled crude cargoes through a competitive bidding process to secure the best price on the international market.
The Guyana government did not accept offers from India, made as recently as last year, to purchase its crude through long-term deals, preferring instead the competitive rates it secures from selling on the open market.
At the time, Vice President Bharrat Jagdeo said Guyana would be more open to a long-term oil sales agreement with India if there were an oversupply in the market, allowing its oil to have a sure destination. He noted that the cost of freight, due to the distance between Guyana and India, makes such a deal more viable only if larger cargoes are lifted.
At present, crude from Guyana’s offshore projects is typically shipped in cargoes of one million barrels, but Jagdeo said an arrangement with India could be more feasible if it could deploy very large crude carriers to lift two million barrels at a time.
