GUYANA VISIT BY PM
THE REASONS & THE FUTURE
SARASIJ MAJUMDER
Prime Minister of INDIA has returned from visiting a small
Caribbean country called Guyana, the first visit by an Indian PM in 56 years. Another Mr. President Irfan Ali broke the protocol to receive PM Modi at the airport. Mr. Modi is more respected outside India! What a travesty!!
Both
Guyana and Barbados, another small Caribbean country, has conferred their
highest national awards on PM of India. People of Indian origin is the biggest ethnic group in
Guyana, and make up 43.5% of the population. There are around 3,20,000
people of Indian origin in Guyana, according to the Ministry of External
Affairs (MEA), which described it as "one of the oldest Indian diasporas,
which migrated more than 180 years ago", during British time.
But, the presence of a large community of Indian-origin was not the reason PM Modi was
visiting Guyana. It may be a tiny country but it is assuming great global
significance recently, due to its very large oil reserves.
Forging economic relations with smaller countries is a part
of NDA’s agenda under Mr. Modi. It serves, in this case, three purposes:-
1.0 Unifies
Global south, with India as leader.
2.0 Encourages
local Indian diaspora to play major role in local politics.
3.0 Last,
but not the least—commercial interest in Oil & Gas reserve of Guyana. This
was the prime mover.
EIL also shall look into the opportunity to setup a Refinery there, under Joint ownership with one of the PSUs -- may be BPCL Good local market to sell the product is there.
Guyana’ Future Prospect:-
Guyana is emerging as
the new Oil exporter as a non-OPEC country. In2-3 years, Guyana may overtake neighbouring Venezuela in oil production,
making it an important Crude Exporter . The rising GDP and Nueva Riches will
also offer a lucrative market for key exporters from India. This country is a very good Export- Import target! Balance
of Trade may be easily achieved.
Guyana
has achieved largest GDP per capita growth in the world in recent years. The
GDP grew 30+% in 2023, after registering growth of 60+% in 2022 and around 30%
in the two previous years. This data is available in public domain.
In the 2010's, significant off-shore oil finds by Exxon has
renewed interest in foreign investment in the country. A 2018 estimate predicts
Guyana's oilfields are holding over 3.2 billion barrels. Off-shore crude oil
extraction began in 2019.
By 2024, oil production in Guyana had soared to
approximately 645,000 barrels per day (bpd), marking a significant increase
from 98,000 bpd in its initial full year of production. Guyana increased crude
oil production by an annual average of 98,000 b/d from 2020 to 2023, making it
the third-fastest growing non-OPEC producing country during this period. The
expansion of this sector has significantly contributed to the national economy,
with the petroleum industry driving a 62.3 percent GDP growth in 2022, the
highest globally according to the IMF. Looking forward, Guyana plans to
further boost its production capacity to about 1.3 million bpd by 2027 through
the development of new projects like Yellowtail, Uaru, and Whiptail.
India, the world's third-biggest oil importer and consumer,
is looking to diversify its crude sources, and Guyana offers a very good prospect.
“India wants to sign a multi-year oil purchase deal with
Guyana and acquire stakes in the South American nation's exploration areas,”
the Guyanese minister for natural resources had said early this year. "We
will make a decision at some point in time". Crude oil sales to India in a long-term deal,
Vickram Bharrat told reporters on the sidelines of industry event ‘India Energy
Week’ in Goa. After a meeting with India's oil minister, Hardeep Singh Puri,
also said ‘Indian companies are interested in picking up stakes in Guyana's
exploration acreage through negotiation rather than a bidding process.’
Guyana was planning to launch an exploration bidding round
for the relinquished areas of Stabroek and other blocks. "We have some
relinquished acreage from Stabroek and other blocks so simply that means
possibly we will have a bidding round, possibly later this year," he said.
Stabroek, a consortium led by Exxon-Mobil that controls offshore production in
Guyana, last year was required to return 20% of unexplored acres under the
original 2016 production contract.
Before Bharrat's visit, the Union Cabinet had approved the
signing of a Memorandum of Understanding (MoU) between the Ministry of
Petroleum and Natural Gas, India and the Ministry of Natural Resources, Guyana,
on cooperation in the hydrocarbon sector. The MoU covers the complete value
chain of hydrocarbon sector including the sourcing of crude oil from Guyana,
the participation of Indian companies in Exploration and Production (E&P)
sector of Guyana, cooperation in the areas of crude oil refining, capacity building,
strengthening bilateral trade, collaboration in natural gas sector,
collaboration in developing regulatory policy frameworks in oil and gas sector
in Guyana.
Guyana also offers a lucrative defence market to India. The
Hindustan Aeronautics Limited (HAL) delivered two Dornier 228 planes to the
Guyana Defence Force in April this year. The deal was part of a Line of Credit
(LoC) Agreement, the first ever defence LOC that India has signed with any
Caribbean nation. Guyana also plans to purchase patrol vehicles, radars and
armoured vehicles from India, sources had told ET.
India is already partnering Guyana in several sectors. India
has offered credit facilities to Guyana for use in mutually accepted designated
fields, agriculture and information technology, being two of these, as per the
High Commission of India in Guyana.
Indian companies have also expressed interest in bio fuel,
energy, minerals and pharmaceuticals. Total trade turn over remains low, though
the trend is positive and encouraging. The Government of India has helped
Government of Guyana in completing the following projects such as National
Cricket Stadium (USD 25 million), supply and installation of 50 solar traffic
lights USD 2.1 million), Drainage pumps (USD 2.9 million) and setting up of a
Centre of Excellence in Information Technology (CEIT) (USD 2 million). Some
projects are under completion such as ocean going vessel/passenger ferry,
construction of East Bank --East-Coast road linkage, acquisition of fixed and
mobile pumps and associated structures and spare, upgradation of three regional
hospitals, rice husk gasifier and assistance for quick impact community
development projects.
DRAGON IS ALREADY THERE:
China already has a massive footprint in Guyana in line with
its plan to partner smaller countries across the world in infrastructure
projects such as the Belt and Road Initiative. India too is doing its bit to get
involved in Guyana's infrastructure
business by committing to a USD 100 million road project in the capital,
Georgetown. But that's only a beginning.
India is left with no other
option but to compete with Chinese companies in the country where China is the
biggest builder, constructing key infrastructure projects such as roads,
bridges and shopping centres, in addition to mining minerals. These are not High-Tech industry, and India
can easily compete, if real intention is
there. As Guyana's location is in the backyard of the US, it will offer a strategic foothold for China, which
USA may not like. Surely, Uncle Sam will like India to compete China there, as a balancing factor.
"The
huge Chinese presence is largely not welcomed by the local people as they are
not employing the local population for their projects. They did initially but
now all of their employees are from China. How does it help us in the long
run?" a local travel agent lamented to PTI.—This situation shall be exploited by India.
Though India can
never go anywhere near the very very
large amount of capital China has put
into its global economic outreach, India has started competing with China in
building its own global infrastructure and energy footprint. Guyana will be a
key partner in that strategy as more and more money keeps pouring into the
small country from sales of newly discovered oil and it expands its
infrastructure.
REFERENCE:--
1.0 https://www.cia.gov/the-world-factbook/countries/guyana/
2.0 India
Today, Oil & Gas Journal, MEA site.
3.0 Stabroek News, Guyana Chronicles--- e- edition. (Newspapers published from Guyana)- Downloaded, and read, when visit was going on.
Image: Google
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