TotalEnergies, QatarEnergy, Petronas to Explore in Guyana

Credit: Adobe Stock/Taras Vykhopen

Oil producers TotalEnergies, Qatar Energy and Petronas have signed a five-year agreement with Guyana's government to explore a shallow-water block, authorities and company executives said on Tuesday.

Guyana has struggled to diversify its energy industry, currently dominated by a consortium that is led by U.S. Exxon Mobil and that has controlled all crude and gas output since the South American country became an oil producer in 2019.

The production sharing agreement for Block S4, located 50-100 km (30-60 miles) off Guyana's coast, is the first signed following a tender in 2023 that allowed the government to allocate eight out of 14 offshore blocks offered to local and foreign producers for exploration and development.

The group will pay a $15 million entrance bonus, Guyana's energy minister Vickram Bharrat said during the signing ceremony.

"Every investor that comes to our shore and signs an agreement with us, they are of the understanding that this partnership will have to be a win-win partnership," Bharrat said.

With a 40% stake, TotalEnergies is the block's operator.

"We want to go fast," said TotalEnergies' Vice President of Exploration for the Americas, Daniel Larrañaga. "We want to explore this basin as soon as we can."

Consortia including Exxon, Delcorp, Watad Energy, Arabian Drillers, Liberty Petroleum, Cybele Energy, International Group Investment, Montego Energy and Sispro also won blocks in the 2023 tender.

The government expects to sign more agreements this year to greenlight exploration in at least two additional offshore areas allocated in the same tender, minister Bharrat told reporters, adding that some negotiations, including bonuses and work programs, must be completed.

An exploration license previously granted to a consortium of Toronto-listed producer Frontera Energy and affiliate CGX Energy for offshore block Corentyne, where reserves were found, was canceled earlier this year after the government said the company had not met requirements for an extension.

(Reuters)