Latest update September 18th, 2026 10:25 AM
Guyana to ink first post-bid oil deal
— TotalEnergies, QatarEnergy, and Petronas secure shallow block S4
(Kaieteur News) – The Government of Guyana, through the Ministry of Natural Resources (MNR), will today sign the country’s first Petroleum Exploration License and Production Sharing Agreement (PSA) arising from the 2022 Offshore Bid Round, awarding the Shallow Water Block S4 to a powerful consortium led by TotalEnergies, QatarEnergy, and Petronas.
Map showing Guyana’s offshore oil blocks; the areas in red attracted bids during the 2022 auction.
This signing represents a major milestone in Guyana’s second wave of petroleum development, ushering in new fiscal terms designed to deliver greater national benefit from offshore exploration. In February this year, the MNR revealed that four Production Sharing Agreements (PSAs) with various companies were on the table to signed this year, following its successful oil blocks auction, launched in December 2022. In addition to the agreement with the Total Energies-led consortium, three other contracts were also to be signed for the blocks S5 – International Group Investment Inc.; S7 – Cybele Energy; and S10 – International Group Investment Inc.
In December 2022, President Irfaan Ali launched the country’s inaugural bid round for 14 offshore oil blocks. Bids were later opened on September 10, 2023 where it was disclosed that six companies submitted bids for eight of the blocks. Kaieteur News had reported that eleven of the oil blocks on auction are located in the shallow area and three are in the deepwater zone. Importantly, the Shallow and Deepwater blocks are governed by separate PSAs. They range between 1000 square kilometres to 3000 square kilometres with the majority of them being close to 2000 square kilometres.
The oil companies will be expected to pay a 10 percent royalty and a 10 percent corporate tax to the government of Guyana. In the meantime, the cost recovery will be capped at 65 percent in a given year, while profits will be shared 50/50 between the parties. These fiscal terms vary significantly from the existing PSA enjoyed by ExxonMobil, the operator of the Stabroek Block. The company pays no taxes but shares 50% profit with government after deducting 75% each month for cost recovery. It also pays a meager 2% royalty to government. The block, which originally spanned 26,800 square kilometers, does not have a ring-fencing provision.
During the virtual launch of the country’s maiden bid round, President Ali said that each interested company participating in the auction will be required to pay US$20,000 for each Block that company or individual is interested in. Additionally, a minimum signing bonus of US$10 million will be required for the oil blocks located in shallow waters and US$20 million for the oil Blocks in the deeper water. The President was keen to point out the difference between the two and the specific variables that will be expected. “There is different type of expertise that is required for shallow water and deepwater. There is different type of capabilities that is required for shallow water and deepwater so the criteria used in this bidding process takes that into consideration to ensure there is great transparency, that those who are participating in the bid meet the minimum requirement. But at the same time, there is enough room for greater participation in the bidding,” he explained. The Head-of-State also stated that there is also a strict relinquishment policy, which means that if the holder of an oil block fails to meet his work commitment, that portion must be handed back to government.
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