TotalEnergies, QatarEnergy and Petroliam Nasional Berhad (Petronas) have received authorisation from the government of Guyana to begin exploration of the offshore S4 block. This five-year production sharing contract follows the 2023 bidding round, in which eight of the fourteen proposed blocks were awarded to both international and local producers.
The S4 block is located between 50 and 100 kilometres off the Guyanese coast. Holding a 40% stake, TotalEnergies will operate the block. The partners have committed to a $15mn entry bonus, according to Energy Minister Vickram Bharrat. He noted that the partnership is based on a win-win approach between the state and international investors.
Towards diversification of upstream operations in Guyana
Until now, Guyana’s oil sector has been largely dominated by a consortium led by Exxon Mobil Corporation, which has controlled all oil and gas production since commercial drilling began in 2019. The new contract represents a shift in the country’s energy policy, aimed at expanding the range of international partners.
Daniel Larrañaga, Vice President of Exploration for the Americas at TotalEnergies, stated that the company intends to begin activities “as soon as possible.” This push for acceleration reflects the strategic importance of Guyana’s offshore basin in regional exploration portfolios.
Additional blocks awarded and upcoming agreements
In addition to TotalEnergies and its partners, several other groups were awarded blocks in the 2023 bidding round, including consortia involving Exxon, Delcorp, Watad Energy, Arabian Drillers, Liberty Petroleum, Cybele Energy, International Group Investment, Montego Energy and Sispro. The government plans to sign further agreements in the coming months for at least two additional offshore blocks, although some contractual elements such as bonuses and work programmes are still under negotiation.
Meanwhile, a licence previously granted to the consortium composed of Frontera Energy Corporation and CGX Energy Inc. was cancelled earlier this year. Authorities stated that the conditions required to extend the permit for the Corentyne block—where reserves had been identified—were not met.
