QatarEnergy, TotalEnergies, PETRONAS to begin drilling offshore Guyana

…Guyana secures US$15M signing bonus

The Government of Guyana, through the Natural Resources Ministry, has officially signed a Production Sharing Agreement (PSA) for shallow-water Block S4 offshore Guyana with a consortium comprising QatarEnergy (35 per cent), TotalEnergies (40 per cent, operator), and PETRONAS (25 per cent). The award was made under the 2022 Guyana Licensing Round, the country’s first-ever bid round, marking another major milestone in Guyana’s efforts to responsibly develop its hydrocarbon resources. The PSA for this block carries a signing bonus of US$15 million.

Block S4 spans approximately 1788 square kilometres (km), located 50 to 100km off Guyana’s coast in water depths ranging from 30 to 100 metres. Exploration activities will be conducted in compliance with Guyana’s regulatory standards and international best practices for environmental protection and resource management.
Natural Resources Minister Vickram Bharrat on Tuesday welcomed the signing, noting that the agreement generated significant interest in Qatar, particularly from QatarEnergy, and has since encouraged other Qatari investors to explore opportunities in Guyana’s various sectors.
“It’s the first PSA that we are signing after the 2016 Starbrook PSA with improved fiscal terms, improved conditions, well, stronger penalties. But I hear you that you are not here to pay penalties. And I fully agree with you. We are not in the business of collecting penalties either. We want exploration, benefits for Guyanese and lead to production. That is what we want. We want other blocks to start producing as well too, and not only the Starbrook block. So that can add to our production figures by the year 2030 and beyond, and something that we can boast of as a small country now developing,” the Minister said.
The Minister reflected on Guyana’s progress in building strong institutional mechanisms early in its oil and gas journey, contrasting it with other nations that took decades to establish sovereign wealth funds. He underscored that the revised Natural Resource Fund Act now includes stricter controls and greater transparency, allowing Guyana to be recognised globally as a model country among new oil producers.
Bharrat pointed to national development achievements funded through oil revenues – such as new bridges, highways, hospitals, schools, free university education, and large-scale housing initiatives – as proof of the sector’s positive impact.
He also addressed the global debate on fossil fuels, emphasising Guyana’s balance between economic development and environmental sustainability.
“Guyana has, really, one of the better-managed oil and gas sectors in the world among new oil-producing countries. And that is something that we’re proud of, and that is something that we can go on the roof and shout about, because there are evidence to demonstrate that. And if we look at the development taking place in Guyana today, it is another testimony of how well the sector is being managed and the resources are being used to enrich the lives of every single Guyanese.”
“Not many countries can say that we are producing 900,000 barrels of oil today, but we still have a forest the size of the United Kingdom. Not many countries can say that we’re looking to develop our gas resources, but we will still be carbon negative. Not many countries can do that. So, our model, I believe, is a model that should be used around the world when it comes to balancing economic development with environmental sustainability.”

PSAs before end of 2025
Further, the Ministry is aiming to finalise ongoing negotiations and sign at least two additional Production Sharing Agreements (PSAs) before the end of 2025.
When asked whether the signing of the Block S4 agreement indicated that the model Production Sharing Contracts (PSCs) for both shallow and deep-water blocks had been finalised and standardised, Minister Bharrat confirmed that this was indeed the case.
Addressing questions about potential changes to the fiscal or non-fiscal terms within the agreements, Bharrat clarified that there were no alterations to the fiscal arrangements.
“We are working to have at least two more signings before the year is out. So we have really advanced the negotiation with those two other awardees, and we are hoping that before the ending of 2025, that we can have those agreements signed with those companies.”
“There were no changes to the fiscal arrangements. It’s 10 per cent tax, corporate tax as you mentioned, 10 per cent royalties, 65 per cent cost recovery, and a 50-50 sharing of property…. There were some expressions of concerns with regards to the non-fiscal terms, some of which we could have worked through, but with regard to the work programme, the fiscal arrangements, the environmental conditions, those were the ones that we were not willing to change or to amend in any way. The fiscal concerns, the fiscal regime – sorry – the work programme in some cases, as well as the environmental standards that were set,” he explained.
When asked about other companies that had been awarded blocks but had not yet completed their agreements, Bharrat said that these were among the entities currently in active negotiations.
However, he noted that progress also depends on the awardees’ ability to secure their signing bonus and demonstrate financial and technical capacity to execute their respective work programmes.
Against this backdrop the Minister confirmed that the Guyanese-owned company Sispro, which had previously faced financial difficulties after being awarded two blocks, remains engaged in negotiations with the Government.
“The team is working feverishly to ensure that we can close off those agreements, but most of the time it also depends on the ability of those awardees from the bedroom to secure, one, their signing bonus, which must be paid upon the signing as mentioned here, and the ability to execute the work programme as well too. So, once we are satisfied that these companies can do that, then we will move ahead with the signing. We know initially that the Guyanese-owned company that was awarded two blocks, they hadn’t come to financial difficulties… They are definitely one of the companies that we are in negotiations with right now, and we are hoping that we can close those negotiations very soon and have at least one of the blocks that was awarded Sispro,” the Minister added.
Meanwhile, Vice President of TotalEnergies, Daniel Larrañaga, expressed his satisfaction with the Production Sharing Agreement (PSA) for shallow-water Block S4 offshore Guyana, highlighting TotalEnergies’ 100-year legacy of pioneering that continues to shape its global mission.
“Last year, we celebrated our 100-year anniversary in TotalEnergies and we call it 100 years of pioneering, and we carry that value very dearly in our DNA of the company. Pioneering spirit is one of our values; safety is our core value, which is result-orientated, and respect for each other. So, when you combine all of those values, it aligns directly with what we want to do here in Guyana,” the Vice President of TotalEnergies said.