Having earlier this year found a new oil supplier in Guyana, to help ease its huge productive sector of the jitters associated with the prevailing policies of an increasingly idiosyncratic Organization of Petroleum Exporting Countries (OPEC), India’s oil demand travails persist in the face of a continuing decline in its own domestic production for the second consecutive month at the end of July.
The performance of the country’s oil refining sector made public last week points to a 3.2% July fall in Indian oil production as the country’s state-run Oil and Natural Gas Company (ONGC) failed to reach its production target.
India’s crude oil production slid in July to 2.5 million tonnes compared with the previous year according to data released by the country’s Ministry of Petroleum and Natural Gas said. In July, ONGC, India’s largest oil and gas producer produced 1.6 million tonnes of crude, 4.2% lower than last year and 3.8% less than the target of 1.7 million tons.
As OPEC’s oil pricing manipulations continued to give rise to some measure of concern in the country’s huge industrial production sector, the Indian oil company, Hindustan Petroleum Corporation Limited (HPCL) a subsidiary of ONGC became the first company anywhere to acquire crude oil from Guyana. Back in March the first cargo of one million barrels of Liza crude was shipped to India, seemingly under pressure to cut dependence on Middle East crudes after OPEC had decided to extend production cuts by its member countries.
In June this year Guyana recorded its second ever sale of oil to India with Reuters reporting on June 30 that the Indian Oil Corporation, one of India’s leading oil refiners had made its first ever purchase of one million barrels of crude from Guyana.
Recent Indian crude oil purchases from Guyana do not gainsay the fact that the country ranks just behind the global powerhouses in oil production, boasting an industry then has been around since the 1890 when the country’s first oil deposits were found in the state of Assam. The country is believed to rank around twentieth among oil producing countries globally.
India’s interest in purchasing oil from Guyana had coincided roughly with the collapse of long-standing arrangements which it had enjoyed with neighboring Venezuela but which had been scuttled more than a year ago by the increasing tightening of US sanctions that targeted the Maduro administration. India, reportedly, had not taken delivery of any Venezuelan crude imports for several consecutive months following Washington’s summary suspension of an oil-for-fuel arrangement between the state-run Venezuelan oil company PDVSA and the Mumbai-based Indian multinational conglomerate, Reliance Industries Limited (RIL).
Earlier this year the Stabroek News had quoted Indian High Commissioner to Guyana Dr. K. J. Srinivasa as saying that New Delhi has an interest in formalizing a long-term contract for the purchase of Guyana’s crude oil. “Collaboration in the oil and gas sector is proceeding successfully and we hope to further strengthen this by working on a long-term contract between the Indian State-run public sector unit – Indian Oil Corporation – and the Government of Guyana for procurement of crude oil from Guyana to India,” the High Commissioner was quoted as saying during a virtual symposium earlier this year on “Perspectives on Guyana-India Relations from 1838 to 2021”.
