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Business News/ News / World/  India, Guyana set to ink pact on oil & gas sector
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India, Guyana set to ink pact on oil & gas sector

Guyana has become the world’s newest oil power after discoveries of crude oil reserves equivalent to more than 11 billion barrels since 2015

This year, Guyana will be putting 14 offshore oil blocks up for auction to boost oil and gas explorationPremium
This year, Guyana will be putting 14 offshore oil blocks up for auction to boost oil and gas exploration

India and Guyana are likely to sign a memorandum of understanding to boost cooperation in the oil and gas sector, Bharrat Jagdeo, vice president of Guyana said on Friday.

In an interview, Jagdeo said Guyana is ready to sign the MoU and is awaiting approval from India’s cabinet.

Jagdeo also laid out ambitious plans for the two nations to partner in energy. Guyana has become the world’s newest oil power after discoveries of crude oil reserves equivalent to more than 11 billion barrels since 2015. This has made the small Caribbean nation home to one of the world’s largest oil reserves. For its part, New Delhi has sought to diversify its sources of supply for oil and has struck supply deals with Brazil and Colombia, among others.

Jagdeo added that Guyana had held discussions with India on oil supplies. The topic figured prominently during its President Mohamed Irfaan Ali’s visit to New Delhi last month.

“We also explored the possibility of India examining the abundant resources that we’ve had outside of those that are on auction now," said Jagdeo, who had also served two terms as the country’s President.

This year, Guyana will be putting 14 offshore oil blocks up for auction to boost oil and gas exploration.

Another opportunity for India lies in the Stabroeck offshore oil block, which is currently operated by US oil major ExxonMobil. Guyana’s government has revealed plans to take back 20% of the oil block from ExxonMobil and explore bilateral partnerships to develop this part of the oil block.

“Next year, ExxonMobil will have to give up 20% of their holdings. So, all of those will be available for some form of bilateral engagement, where we can actually see joint production or exploration related activities," Jagdeo said.

Guyana is also looking to recruit skilled workers from India to help develop the country’s fledgling gas sector.

“We don’t want India’s involvement only in defining our gas policy, but also from an investment perspective to develop those resources," he said.

Talks between New Delhi and Georgetown have also extended beyond energy. During Jagdeo’s visit, both sides affirmed their intent to sign an air services agreement (ASA).

“Indians have a sizeable presence in Guyana and are the largest ethnic group comprising about 40% of the population as per 2012 census. The signing of ASA with Guyana will enable a framework for provision of air services between the two countries," a statement from India’s civil aviation ministry said. “The new ASA will provide enabling environment for enhanced and seamless connectivity while providing commercial opportunities to the carriers of both the sides," the statement said.

Jagdeo said he expects the agreement to go into force imminently, after an exchange of diplomatic notes between the two countries.

“A lot of Guyanese businesses are interested in sourcing goods and services from India. On this trip, many of them are with me. We also need a lot of skilled people to come to our part of the world. But what is crucial is the links between both countries like shipping and air transportation. Right now, people have a hard time flying to Guyana. They have to go through New York or the UK and many can’t secure a visa. So we are hoping to strengthen air ties between the countries so that you can have a easier transit for people," Jagdeo added.

Agriculture and defence will also form a key focus area for cooperation between India and Guyana.

“We’ve identified a large number of areas of technical skills that are available in India that we plan to aggressively recruit into our agricultural efforts,’ Jagdeo said. In particular, Guyana would look for Indian support in developing its capabilities in sugar, rice, biofuels, livestock development and a range of cash crops. Guyana plans to develop its agribusiness sector and move away from small-scale farming.

During his ongoing visit to India, Jagdeo met with Minister for agriculture and farmers welfare Narendra Singh Tomar.

Guyana has also demonstrated a keen interest in Indian defence platforms. During his January visit, President Irfaan Ali stated that his country was looking to modernize its military and was eyeing Indian capabilities.

Jagdeo confirmed that Guyana was seriously considering moving forward with defence purchases from India. The country’s requirements are largely geared towards protecting its economic resources and for domestic duties rather than active warfare. Guyana’s interest is in maritime assets like patrol vehicles and air transport aircraft to help improve domestic connectivity.

Indian High Commissioner to Guyana, K J Srinivasa, said the aim is to help Guyana defend its resources at sea. He confirmed that India’s focus would be on providing fast patrol boats to Guyana’s coast guard and also alluded to ongoing discussions with Guyana on India’s Dornier aircraft.

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Published: 24 Feb 2023, 11:23 PM IST
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