Nigeria, Guyana visits: Stronger oil trade tops PM Narendra Modi's agenda

Nigeria among India's top crude suppliers; OVL eyes offshore Guyanese blocks

Prime Minister Narendra Modi left for a three-nation tour to Nigeria, Brazil, and Guyana on Friday. The trip would highlight India’s strategic push to diversify its energy sources and strengthen trade partnerships in crude oil.

 

Modi will visit Nigeria on November 16-17. He will then head to Brazil for the annual G20 Leaders Summit for two days, followed by a visit to Guyana on November 19 to 21.

 

This tour marks the first visit by an Indian Prime Minister to Nigeria in 17 years and to Guyana since 1996. Both Nigeria and Guyana are now fast-expanding their petroleum production.

 

 

Nigeria, Africa’s largest oil producer, has overhauled its petroleum sector, long hampered by corruption and inefficiencies, and has significantly boosted production since the commissioning of the Dangote refinery in 2023. The facility, owned by Aliko Dangote, Africa’s richest individual, ranks as the world’s seventh-largest by capacity and has elevated Nigeria’s output to 1.8 million barrels per day (bpd), according to official data. 

 

 

“The prime minister’s visit will emphasise aligning energy priorities to establish multiple reliable oil supply chains,” a senior official said. “India has repeatedly been Nigeria’s largest crude buyer over the past two years.”

 

India imported $1.53 billion worth of Nigerian crude in the April-August period of FY25, making Nigeria its eighth-largest source of oil, a slight decline from the $3.4 billion imported in FY24 when it was the seventh-largest supplier. Nigeria exported an average of 0.8 million bpd until July 2024 and is expected to expand exports further in coming years.

 

Nigerian crude has been crucial over the past two years in helping Indian oil companies manage demand and stabilise supply schedules, said a petroleum ministry official. While discounted Russian crude has reduced average import costs, fluctuations in global oil supply have reinforced the need for stable partnerships, with Nigeria playing a pivotal role.

 

The country is also set to begin exporting refined petroleum soon. “The Dangote refinery began production in September, and is expected to begin export soon," said an official from Engineers India Limited, which had provided project management consultancy (PMC) services for the construction of the refinery.

 

Indian firms have established a strong presence in Nigeria, with investments totalling $27 billion. Over 200 Indian companies, including Airtel Nigeria, Bajaj Auto, and Godrej Africa, operate in the country.

 

Guyana also features prominently in India’s energy diversification strategy. With an estimated 11.2 billion oil-equivalent barrels — 18 per cent of global oil and gas discoveries and 32 per cent of discovered oil — the South American nation is rapidly emerging as a major player. Despite its smaller scale, Guyana has the potential to transform global energy markets.

 

India imported $148 million worth of Guyanese crude in 2021-22. The country started oil production in December 2019.

 

ONGC Videsh, the overseas arm of Oil and Natural Gas Corporation, has explored opportunities in Guyana, including bids for 14 exploration blocks, though the outcomes remain unclear. As of May 2024, Guyana was producing about 645,000 b/d of crude and gas equivalent. Earlier this year, India approved a five-year memorandum of understanding with Guyana to collaborate in hydrocarbons, including crude sourcing.