Guyana completes production sharing agreements for five offshore blocks

Guyana Government Accepts PSAs for Offshore Exploration

Guyana’s government has accepted production sharing agreements (PSAs) with multiple energy companies for the exploration of five offshore oil and gas blocks, reported Reuters, citing the energy ministry.

Companies Involved in the Agreements

The companies that have reached agreements include Cybele Energy, Delcorp, International Group Investment, Petronas, Qatar Energy, and TotalEnergies.

Exploration of Shallow and Deep Waters

These agreements are crucial for the exploration of new offshore areas in both shallow and deep waters.

This development follows a 2022 tender that attracted bids for eight blocks as part of efforts to diversify Guyana’s energy sector, currently dominated by an ExxonMobil-led consortium.

ExxonMobil is also in discussions with the government regarding the exploration of offshore area S8, with a focus on carbon capture and storage. The PSA for this block is still under review.

Separate Negotiations with Exxon, Hess, and CNOOC

The head of Guyana Exxon confirmed that separate negotiations are ongoing with Exxon, Hess, and CNOOC regarding their joint bid, although the final documents for the awarded areas are yet to be signed, signaling that the agreements are in their final stages.

The energy ministry mentioned that a response is still awaited from Sispro Energy regarding its offers for two of the blocks.

Audit Contract Awarded

This month, Guyana’s tender board awarded VHE Consulting a $1.5 million (G$313.3 million) contract to audit Exxon’s expenses and Guyana’s oil profit share for the 2021–23 period.

In May 2024, a government official announced that Qatar Energy, TotalEnergies, and Petronas were granted approval to begin exploring the shallow water block S4, following the country’s first-ever competitive auction for 14 offshore blocks launched in September 2023.

ExxonMobil’s Hammerhead Project

As of July 2024, ExxonMobil planned to drill up to 30 wells at its latest project in Guyana, known as Hammerhead. This seventh project is expected to begin production in 2029, increasing Guyana’s oil output to more than 1.4 million barrels per day.