By: Oil & gas middle east

A New Consortium Enters Guyana's Waters

A major new partnership has been formed to explore for oil and gas offshore Guyana. TotalEnergies, QatarEnergy, and Petronas have signed a five-year production sharing agreement with the Guyanese government for the shallow-water Block S4. This deal marks a significant step for Guyana in its goal to diversify its energy industry, which has been dominated since 2019 by a consortium led by ExxonMobil. The block is located 50–100 kilometers off the coast and is the first to be finalized from a 2023 tender for offshore exploration rights.

Terms of the Agreement and Strategic Goals

The consortium will pay a $15 million entrance bonus to the Guyanese government. TotalEnergies, holding a 40% operating stake, has expressed a clear intent to move quickly. "We want to go fast. We want to explore this basin as soon as we can," stated Daniel Larrañaga, TotalEnergies’ Vice President of Exploration for the Americas. The deal reflects Guyana's desire for "a win-win partnership," as emphasized by Energy Minister Vickram Bharrat, balancing foreign investment with national benefit.

Broadening the Energy Landscape

This agreement is part of a broader effort by Guyana to open its energy sector to more international players. The 2023 tender led to the allocation of eight out of fourteen offered offshore blocks to various consortia, which include other major names like Exxon, Delcorp, and Watad Energy. The government anticipates signing at least two more agreements from this tender within the year, signaling a rapid and deliberate expansion of its hydrocarbon exploration activities.

A Market of Opportunity and Enforcement

Guyana's approach to managing its resources was further demonstrated earlier this year when it cancelled an exploration licence for the offshore Corentyne block held by Frontera Energy and CGX Energy. The government cited the companies' failure to meet extension requirements, despite a discovery of reserves, underscoring its commitment to holding operators to their contractual obligations and maintaining momentum in developing its energy sector.