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An Indian Oil tanker driver waits outside a fuel depot in Mumbai, India, October 6, 2017. (Photo: Reuters/ Danish Siddiqui)

Guyana sells crude to Indian Oil Corp under 3-million-tonne contract

An Indian Oil tanker driver waits outside a fuel depot in Mumbai, India, October 6, 2017. (Photo: Reuters/ Danish Siddiqui)

Guyana has secured another purchase of its Liza crude from India, in particular, State-owned integrated energy company Indian Oil Corp Limited (IOC).

“Guyanese crude being loaded from FPSO Liza Destiny onto crude tanker Militos for transportation to our Paradip Refinery. Indeed a giant step by India & #IndianOil towards diversification of crude sourcing,” the company tweeted on Friday, July 3.

Reports have emerged that the governments of both nations were integral in brokering the deal.

In fact, a tweet from the Indian High Commission in Guyana read (sic): “Concrete step in Indo-Guyana economic relations,1st 1 million barrels Liza crude for @IndianOilcl loaded frm FPSO Liza Destiny destination, enhanced cooperation+important step in diversification of crude sourcing+future roadmap.”

This marks the second time that Guyana has shipped its light, sweet crude to the subcontinent, after transporting one million barrels of the commodity to India’s Mundra port on a Trafigura-consigned vessel in March this year.

On the first occasion, private refiner Hindustan Petroleum Corporation Limited also bought a million barrels.

“We have procured one Suezmax of Guyanese Liza crude and have also entered into a term contract for 3 million metric tonnes of US crude for further diversification”

— Shrikant M Vaidya, chairman, Indian Oil Corp Limited

Diversification realised

At that time, according to a Reuters report, India’s Government charged refiners to speed up the diversification of imports to cut their dependence on Middle Eastern crudes after OPEC+ decided in March to extend production cuts through April 2021.

The shipment between Guyana and India comes almost two weeks since the latter appealed to the Organization of Petroleum Exporting Countries and their allies (OPEC+) to boost production of oil to meet global demand and ease spiralling costs. However, to date, OPEC+ has yet to acquiesce to India’s request as the United Arab Emirates refuses to adjust its baseline production target.

India again urges OPEC+ to boost oil supply amid price concern

According to a tweet from India’s Ministry Petroleum and Natural Gas, on July 2, the shipment from Guyana should arrive at Paradip port in the first week of August.

“The crude purchase from Guyana marks an important step in diversification of crude sourcing by India. Also a beginning of a future roadmap (sic) of extended collaboration in oil and gas sector with Guyana,” a follow-up tweet explained.

An OPEC flag sits on a table ahead of the 169th Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria, on Thursday, June 2, 2016. United Arab Emirates has refused to adjust its baseline production target, resulting in a stalemate on the decision to boost crude production. (File photo)

India is the third-largest importer and consumer of oil in the world. At present, the Asian country imports approximately 84 per cent of its overall crude oil, over 60 per cent of which comes from Middle East nations.

Providing more details on the transaction, IOC Chairman Shrikant M Vaidya told Oil Now Guyana, “We have procured one Suezmax of Guyanese Liza crude and have also entered into a term contract for 3 million metric tonnes of US crude for further diversification.”