First Deal from the 2023 Tender
The agreement covers Block S4, located approximately 50-100 km (30-60 miles) off Guyana's coast. It is the first production sharing agreement to be finalized following a competitive 2023 tender, during which the government allocated eight out of 14 offered offshore blocks to both local and foreign producers for exploration and development.
Guyana's Energy Minister, Vickram Bharrat, confirmed during the signing ceremony that the consortium will pay a $15 million entrance bonus.
"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 stated, emphasizing the mutual benefits of the deal.
TotalEnergies Leads the Consortium
Under the terms of the agreement, TotalEnergies will serve as the block’s operator, holding a 40% stake in the venture.
Daniel Larrañaga, TotalEnergies' Vice President of Exploration for the Americas, expressed the company's eagerness to begin work, stating: "We want to go fast. We want to explore this basin as soon as we can."
Future Outlook and Contract Cancellations
Other consortia, including those involving Exxon, Delcorp, Watad Energy, Arabian Drillers, Liberty Petroleum, Cybele Energy, International Group Investment, Montego Energy, and Sispro, also secured blocks in the 2023 tender. Minister Bharrat indicated that the government expects to sign more agreements this year, aiming to greenlight exploration in at least two additional offshore areas once negotiations regarding bonuses and work programs are completed.
This push for new exploration contracts follows the earlier cancellation of an exploration license. A license previously granted to a consortium of Toronto-listed producer Frontera Energy and its affiliate CGX Energy for the offshore Corentyne block was revoked after the government determined the company failed to meet the requirements necessary for an extension.