TotalEnergies and Petronas get the green light for exploration in Guyana

TotalEnergies and Petronas are oil producers who have signed an agreement for five years with the Guyana government to explore shallow-water blocks, officials and executives of both companies said on Tuesday.

Guyana is struggling to diversify its industry. Its energy sector is currently dominated by an Exxon Mobil-led consortium, which controls all oil and gas production since Guyana became a producer of crude oil in 2019.

Block S4, which is located between 50 and 100 km (between 30 and 60 miles) off the coast of Guyana, was the first production sharing agreement signed after a 2023 tender that allowed the Government to allocate eight offshore blocks to local and international producers for exploration.

During the signing ceremony, Guyana’s Energy Minister Vickram Bharrat announced that the group would pay an entrance bonus of $15 million.

Bharrat stated that "every investor who comes to our shores and signs an agreement will be of the understanding this partnership must be a win-win partnership".

TotalEnergies, with a stake of 40% in the block, is its operator.

Daniel Larranaga, Vice President of Exploration for the Americas at TotalEnergies, said: "We want fast." "We want explore this basin as quickly as possible."

In the tender for 2023, consortiums including ExxonMobil, Delcorp Watad Energy Arabian Drillers Liberty Petroleum Cybele Energy International Group Investment Montego Energy Sispro and others won blocks.

Minister Bharrat, who spoke to reporters, said that the government expected to sign additional agreements this year for exploration in two additional offshore areas allotted in the same bid.

A government-issued exploration license granted previously to a group of Frontera Energy, a Toronto-listed company, and its affiliate CGX Energy, for the offshore block Corentyne where reserves were discovered, was canceled in the first quarter of this year, after the company failed to meet the requirements for extending the license. (Reporting and writing by Kemol King, Marianna Pararaga, Frances Kerry).

(source: Reuters)