Guyana will soon sign a oil deal with TotalEnergies led group
Energy Minister Vickram Bharrat said that Guyana is expecting to sign a production-sharing agreement soon with a French consortium led by TotalEnergies, which will allow the country to explore an off-shore area.
Guyana, the fastest-growing oil producing country in the world, is on track to produce 940,000 barrels of crude oil per day this coming year. This is nearly 1% more than last year's output.
All of Guyana's crude oil is produced by a consortium led the U.S. company Exxon Mobil. TotalEnergies, a consortium led by Exxon Mobil, won the block at an auction held in 2023. The government has been trying to diversify this sector.
Bharrat, in an interview on the sidelines an industry conference held in Georgetown, said that in addition to the agreement with TotalEnergies at least three more contracts for exploration blocks won in that auction would be signed in this year.
Bharrat stated that Guyana was also looking at options for re-offering an offshore block, where Frontera Energy of Toronto and CGX Energy had made oil discoveries.
After Exxon's successful Stabroek Block, where 11 billion barrels worth of recoverable oil resources were found, the Corentyne Block was considered the next likely area for development.
According to the government's decision, the license of Frontera and CGX on Corentyne expired last year, after the consortium failed to renew its license.
The consortium claimed that the government informed them earlier this month of the cancellation. Bharrat stated that the firms had sent a dispute letter to the government disputing the license cancellation. This could mean the case would go to court.
Bharrat stated that "we have been very lenient and helpful with CGX as we would with any other company investing in Guyana. But there is a limit."
There's only so far we can bend the rules... without breaking them. "There was no legal basis for me to extend the license," he said.
Frontera and CGX found light oil and gas condensate at Corentyne between 2022 and 2023 but failed to complete a block appraisal in 2024.
Frontera stated that it would be looking for investors in 2023 to help fund the development of the project. Frontera has not yet disclosed any partners.
When asked why the consortium was struggling to complete its mandatory exploration program, the minister responded that it was both a capacity problem and a money problem. He added that delays in drilling equipment delivery contributed to the problem.
Frontera and CGX didn't immediately respond to a comment request.
Bharrat stated that the government could either open a new round of bidding to reoffer this block, or directly negotiate with interested parties.
He said that "once it is completely cleared up, I believe there will be many companies interested in it."
He said that Corentyne might still be developed soon, but Exxon would continue to dominate Guyana’s oil industry for the next few years.
CONTRACTS TO CAME
He added that the government and Exxon have not yet agreed on terms to explore another area won by the group in the auction of 2023.
Bharrat stated that the consortium and government reached a recent agreement regarding a portion Stabroek which will be returned to government in this year. Bharrat said that because the areas are spread out across the block they may need to be re-delimited in the future.
The government forecasts an average oil production of 675,000 barrels per day (bpd) this year, compared to 616,000 in 2024. The minister stated that Guyana will receive a cargo or two this year, as part of the oil produced by Exxon’s fourth floating production facility. This facility is expected to start producing in the third quarter.
Guyana was Latin America's fifth-largest crude exporter last year, after Brazil, Mexico and Venezuela.
(source: Reuters)
