The impending entry of more major oil companies into Guyana’s oil basin has been met with enthusiasm, with Natural Resources Minister Vickram Bharrat deeming it a welcome development for the nation’s growing energy industry.
“The talks between Total[Energies], Qatar[Energy] and Petronas have really advanced and we’ll be very happy to have them in country,” he shared during a recent appearance on the Energy Perspectives podcast.
The consortium was awarded Block S4 in Guyana’s first offshore auction.
TotalEnergies and QatarEnergy already have a presence in the Guyana Basin. TotalEnergies has a 35% stake in the ExxonMobil-operated Canje Block and holds a 25% interest in the Orinduik Block in a joint venture with QatarEnergy.
TotalEnergies will be leading Suriname’s first offshore development in the Gran Morgu field.
When the deal with Guyana is finalized, TotalEnergies will have interests in seven blocks in the Guyana-Suriname basin.
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The Ministry in a recent statement said it expects the consortium to sign their production sharing agreement (PSA) this year. Also signing PSAs will be International Group Investment Inc. for Blocks S5 and S10 and Cybele Energy for Block S7.
“Those are major oil companies and we will love to have them in Guyana. We know Total[Energies] is in Suriname. We have a good relationship with Qatar – a very good relationship I must say – and Petronas, they are in Suriname and will now be entering Guyana and we will be happy to have them in Guyana, very soon,” he added.
The auction kicked off in 2022. Guyana introduced its new model PSA with updated terms. The new PSA has a 10% royalty rate, up from the 2% in the widely criticized Stabroek PSA. The 75% cost recovery ceiling in the Stabroek PSA has been lowered to 65% in the new model contract.
The sharing of profits after cost recovery will remain 50/50 between the government and the contractor. Additionally, a corporate tax of 10% will be instituted, where there was none before. Last year, the Ministry said only four out of the six bidders did not accept the terms – the Exxon-led consortium and the lone Guyanese company Sispro Inc.
