GEORGETOWN: India in talks with Guyana to buy Stabroek Block oil

GEORGETOWN:  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.
This development has been confirmed by Minister of Natural Resources, Vickram
Bharrat, who in an invited comment told this publication that while the request
has been made, a decision is still to be taken.
The move by the Indian Government — according to a recent CNBC report—comes
amidst rising crude price, which is impacting the petrol and diesel prices.
According to the report, “the (Indian) Ministry of Petroleum and Natural Gas is
in discussion with Guyana and Mexico for short-term oil contracts which will
help a tad bit in offsetting earlier high-priced, long-term contracts.”
India already has about six million tonnes of oil contract with Mexico,
according to the CNBC report.
The publication said that “it also learnt that if the US lifts sanctions on
Iran for oil production from its existing fields, it may bring some relief to
India but that may take six months’ time to come online.”
India is reportedly 86 percent dependent on crude import and the Indian crude
basket is a little above US$61 per barrel.
Brent prices have since rebounded to US$70 per barrel and constitute almost 75
percent of the Indian crude basket.
The Indian crude was priced at US$20 per barrel in April 2020 when the demand
was at its lowest low due to Coronavirus-led lockdown.
The central and state governments have also increased taxes on petroleum products
like petrol and diesel which are now hurting consumers with an increase in
crude prices.
India’s Minister for Petroleum and Natural Gas, Dharmendra Pradhan, is reported
as constantly urging OPEC and OPEC+ countries to increase production to meet
the growing demand and balance pricing.
However, OPEC decided to continue production cut and Saudi Arabia made a
comment that India should use its strategic crude reserves to cool down prices.
ExxonMobil along with its partners—Hess Corp and China National Offshore Oil
Company (CNOOC)—began production of high quality crude oil in Guyana’s Stabroek
Block in December 2019.
The country collected its first lift of one million barrels in February, the
first year under a lifting agreement that was inked between the partners.
Under that agreement, Guyanese authorities have since sold several of its lifts
with the country in the process of finalising the recruitment of a marketing
firm, on a term basis, to assist in selling Guyana’s future crude entitlement.
To date Guyana has uplifted a total of 5,009,797 barrels of oil, sold for
US$246,542,662.