A 2% slip in India’s overall oil production in December is not a development that is likely to escape the attention of a country which ranks third – behind the United States and China – and which is 85% reliant on imports in order to meet its domestic crude oil needs.
Recently India’s Financial Express reported that in December the country’s oil production was 2.51 million tonnes, down from the 2.55 million tonnes realized a year earlier and from a set December 2021 target of 2.6 million tonnes.
India’s reduced production level at the end of last year is attributed to a lower production output from the state-run Oil and Natural Gas Corporation. (ONGC), the country’s biggest oil producer on account of what, reportedly, were delays in mobilizing equipment at its western offshore fields.
India’s heavy reliance on oil imports has seen recent tensions between itself and the Organization of Petroleum Exporting Countries (OPEC) over higher prices. Unsurprisingly, securing oil supplies from such sources with which the country can strike favourable deals is a priority.
Last year the Indian state-run oil refinery, Indian Oil Corporation (IOC) announced that it had “procured one Suezmax of Guyanese Liza crude,” the first of two shipments acquired from Guyana. Following the first transaction India’s High Commissioner to Guyana, Dr. K. J. Srinivasa had been quoted in the media as saying that “collaboration between Guyana and India in the oil and gas sector is proceeding successfully” and that India was hoping to further strengthen that collaboration “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.”
In August last year, however, the Ministry of Natural Resources in Georgetown announced that a long-term supply deal had been ruled out. Vice President Bharrat Jagdeo, who is seen as Guyana’s oil ‘Czar,’ was subsequently quoted as saying that the country had decided against a long-term arrangement. “We told them they would have to put in a bid along with all the companies,” Jagdeo was quoted as having told a local television station.
