GUYANA: Indian company makes first purchase of Guyana’s oil

OIL: Exxon: Liza Destiny

Jul 03, 2021 – Kaieteur News – Indian Oil Corporation Limited, a State owned refinery has just purchased its first million barrels of Guyana’s light sweet crude oil from the Liza project. According to international news entity, Reuters, the shipment will arrive on August 8 at India’s Paradip port aboard the Greece-flagged tanker, Militos, and is to serve the purpose of a trial cargo as the governments of India and Guyana attempt to negotiate an oil supply contract.

This marks the first time that an Indian state refinery has purchased Guyanese crude. In March, Private refiner, HPCL-Mittal Energy Limited, purchased a million barrels.       

An oil supply contract for state refineries has long reaching implications, as India is the world’s third biggest oil importer and consumer. It also imports over 80 percent of the oil it consumes.

Oprice.com had previously reported that there are two main dimensions to India’s interest in Guyanese oil. The first is economic in nature and stems from India’s willingness to diversify its crude imports. Despite its current COVID-triggered difficulties, industry experts believe India’s appetite for crude will grow larger as the impacts of the pandemic begin to lessen. Furthermore, India has been voicing its discontent with the Organisation of Petroleum Exporting Countries (OPEC) pricing and production policies and securing a new stream would prove invaluable for Indian refiners.

The second link between Guyana and India is less pronounced but still noteworthy says Oilprice.com. It relates to the fact that India and Guyana share cultural links and a history of trade relations hence the birth of the deal.

It should be noted too that on the heels of a decision by the Organisation of Petroleum Exporting Countries and its allies, also known as OPEC+ to not ease supply curbs, global oil prices had spiked and consequently, India had asked state refiners to expedite the diversification of crude sources to lessen the demand on Middle Eastern oil, the results of which saw engagements with the government of Guyana for Liza oil.

This first ‘trial shipment’ occurs at a time when the global oil prices appear to be fluctuating around US$75 per barrel, which has been the highest it has ever been since Guyana began production in 2019. Despite this apparent prime position for Guyana however, no mention has been made as it relates to the price per barrel of the Guyanese oil that India has acquired.

When contacted by this publication to comment on the matter of the selling price, the government had indicated that the relevant details would be made known in an upcoming press release. To date, such a release has yet to be issued.

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