The Indian government today approved the signing of a memorandum of understanding (MoU) between India and Guyana on cooperation in the hydrocarbon sector, according to Reuters.
The proposed MoU will cover the complete value chain of hydrocarbon sector including sourcing of crude oil from Guyana, participation of Indian companies in exploration and production sector of Guyana and cooperation in crude oil refining.
Asian News International (ANI) said that the Union Cabinet, chaired by Prime Minister Narendra Modi, approved the signing of the MoU between the Ministry of Petroleum and Natural Gas, India and the Ministry of Natural Resources, Guyana, on cooperation in the hydrocarbon sector.
According to an official release, it will include cooperation in the area of clean energy, including biofuels as well as the renewables sector, including solar energy.
ANI said that the MoU with Guyana will strengthen bilateral trade, foster investment in each other countries and help diversify the source of crude oil, thus augmenting the energy and supply security of the country.
The agreement shall enter into force on the date of its signature, remain in force for a period of five years and be automatically renewed thereafter on a quinquennial basis unless either party gives the other party written notice three months in advance of its intention to terminate this understanding.
As per the BP Statistical Review of World Energy 2022, India is the world’s 3rd largest energy consumer, the 3rd largest consumer of oil, the 4th largest refiner and the fastest-growing major economy with rising energy needs.
The BP Energy Outlook and International Energy Agency estimate that India’s energy demand would grow at about 3 per cent per annum until 2040, compared to the global rate of 1 per cent. Further, India is likely to account for approximately 25-28 per cent of the global energy demand growth between 2020-2040.
With a view to giving further impetus to ensure energy access, availability, and affordability to citizens underpinned by energy security of the country, ANI said that India is focusing on fostering new partnerships in the hydrocarbon sector, both through diversification of crude oil sources and through the acquisition of quality overseas assets.
Reuters said that India and Guyana have been in discussion about a potential bilateral oil agreement for more than two years.
Last year, it said that Guyana had turned down the Indian government’s request for discounted crude oil purchases during trade discussions.
