A consortium of Petronas, QatarEnergy and TotalEnergies signed its Petroleum Exploration License for the S4 shallow block in Guyana’s offshore waters, a historic feat after the country’s maiden auction launched in 2022. The signing ceremony was held this morning at the Pegasus Suites and Corporate Centre in Georgetown.
The deal carried a US$15 million signing bonus to be paid directly into the Natural Resource Fund (NRF). The previously noted signing bonus ceiling for shallow water blocks was set at US$10 million. Guyana got an additional five.
This marks Petronas’ entry in the Guyana side of the basin shared with Suriname. For TotalEnergies and QatarEnergy, it is their return after exiting the Ordinduik Block in 2024.
TotalEnergies is the operator of the block with a 40% stake, along with QatarEnergy 35% and PETRONAS 25%.
With the license signed, TotalEnergies’ Vice President of Exploration (Americas), Daniel Larranga, said the consortium is excited to commence with its work programme.
“We want to go fast. We want to explore this basin as soon as we can. Safety is one of our core values, resource-oriented and respect for each other. So when you combine all of those values, it is exactly aligned [with] what we want to do here,” he shared.
Director of the Local Content Secretariat and Legal Officer at Guyana’s Ministry of Natural Resources, Michael Munroe, shared that the TotalEnergies-led consortium was deemed “the most substantially responsive bidder” after submissions closed on September 12, 2024.
“The negotiations were characterized by mutual respect, compromise, practicality and accommodation, and good faith,” he added.
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This is the first agreement being signed under the Guyana government’s new fiscal regime. It entails a 10% royalty rate, a 10% corporate tax and a lowered cost recovery ceiling, while profit sharing remains a 50/50 split between the government and contractors.
These terms differ from the widely criticized Stabroek Block Petroleum Sharing Agreement (PSA).
Guyana’s Minister of Natural Resources, Vickram Bharrat, emphasized that the partnership must be a “win-win”.
“The partnership must yield benefits to Guyana and Guyanese…we believe Guyana and Guyanese deserve world-class facilities, deserve a better standard of living too,” he underscored.
Guyana goes after hefty investments in oil blocks auction | OilNOW
Guyana’s offshore basin, with an estimated reserve exceeding 11 billion barrels of oil equivalent in the Stabroek Block alone, continues to attract global attention since the 2015 oil discovery. The basin is now considered the gateway to the world’s fastest-growing super basin.
