Wedoany.com Report-Nov. 12, TotalEnergies (TTEF.PA), QatarEnergy (QATPE.UL), and Petronas (PETRA.UL) signed a five-year production sharing agreement with the government of Guyana on Tuesday to explore a shallow-water block, according to government officials and company executives. The deal marks a significant step in Guyana’s efforts to diversify its energy sector, which has been largely dominated by a consortium led by Exxon Mobil (XOM.N) since the country began oil production in 2019.

The TotalEnergies logo sits on the company's headquarters skyscraper in the La Defense business district near Paris, France, June 26, 2023.

The newly signed agreement covers Block S4, located 50 to 100 kilometers off Guyana’s coast. It is the first deal concluded under a 2023 tender process, through which the government offered 14 offshore blocks to both local and international producers. Eight of those blocks have already been awarded for exploration and development.

During the signing ceremony, Guyana’s Minister of Natural Resources Vickram Bharrat said the consortium would pay a $15 million entrance bonus. He emphasized the importance of mutual benefit in such partnerships: “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.”

TotalEnergies, which holds a 40% stake, will serve as the operator of Block S4. The company’s Vice President of Exploration for the Americas, Daniel Larrañaga, said: “We want to go fast. We want to explore this basin as soon as we can.” His remarks reflect the consortium’s plan to accelerate exploration activities in the area.

Other companies that secured exploration rights during the 2023 bidding round include Exxon Mobil, Delcorp, Watad Energy, Arabian Drillers, Liberty Petroleum, Cybele Energy, International Group Investment, Montego Energy, and Sispro. The government views this diversification of operators as a key step toward expanding its energy portfolio and increasing competition within the sector.

Minister Bharrat added that Guyana expects to sign additional exploration agreements later this year. These will cover at least two more offshore areas awarded during the same 2023 tender. He explained that discussions are ongoing to finalize details such as signing bonuses and specific work programs before formal agreements are concluded.

Earlier this year, the government canceled an exploration license previously granted to a consortium of Frontera Energy (FEC.TO) and its affiliate CGX Energy (OYL.V) for the offshore Corentyne block. The decision followed a review that found the companies had not met the requirements necessary to secure an extension, despite earlier reserve discoveries in the area.

The new partnership with TotalEnergies, QatarEnergy, and Petronas signals Guyana’s continued progress in opening its offshore sector to a broader mix of global operators. It is also expected to support the country’s long-term strategy to expand exploration capacity, strengthen investment inflows, and reduce dependence on a single producer group for crude and gas output.