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Guyana to sign oil deal with TotalEnergies-led consortium

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Government seeking options to re-offer Corentyne block

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Exxon continues to dominate Guyana's oil industry

By Marianna Parraga and Kemol King

GEORGETOWN, Feb 20 (Reuters) - Guyana expects to soon

sign an oil production-sharing agreement with a consortium led

by France's TotalEnergies that will allow it to

explore an offshore area, Energy Minister Vickram Bharrat told

Reuters.

Guyana is the world's fastest-growing oil-producing country

and is on course to reach capacity of 940,000 barrels per day

this year - nearly 1% of global supply - up from an output of

616,000 bpd last year.

A consortium led by U.S. major Exxon Mobil ( XOM ) produces

all Guyana's oil. The government, which has sought to diversify

the sector, awarded TotalEnergies's consortium the block in an

auction in 2023.

As well as the agreement with TotalEnergies, at least three

other contracts for exploration blocks awarded in that auction

should be signed this year, Bharrat said in an interview with

Reuters on the sidelines of an industry conference in the

capital Georgetown on Wednesday.

Guyana is also exploring options to reoffer an offshore

block where a consortium by Toronto-listed Frontera Energy ( FECCF )

and CGX Energy ( CGXEF ) made oil discoveries, Bharrat

said.

The Corentyne block was seen as the likely next area for

development after Exxon's success at the Stabroek block, where

more than 11 billion barrels of recoverable oil and gas

resources have been found.

Frontera and CGX's license on Corentyne has expired,

according to the government, which did not approve the

consortium's application to extend the license last year.

Earlier this month, the consortium said the government

notified them of the license cancellation. The firms have sent a

letter disputing the cancellation to the government, Bharrat

said, which means the case could go to court.

"We have been very lenient with CGX, very helpful to them

like we are with any company investing in Guyana, but there's a

limit too," Bharrat said.

"There's only so much we can bend... without breaking our

laws. And there was no legal ground for me to extend (the

license)," he added.

Frontera and CGX discovered light oil and condensate in

Corentyne in 2022 and 2023, but failed to complete an appraisal

of the block in 2024.

In 2023, Frontera said the company was looking for investors

to help finance development of the project. The company has yet

to disclose any partners.

"It's both a capacity and a financial problem," the minister

said when asked about the consortium's struggles to complete the

mandatory exploration program. Delays in the delivery of

drilling equipment contributed, he added.

Frontera and CGX did not immediately reply to a request for

comment.

The government could open a bidding round to reoffer the

block or negotiate directly with interested parties, Bharrat

said.

"Once it's completely cleared, I think there will be a lot

of companies interested in it," he said.

Corentyne could still be developed fairly soon, he said, but

the Exxon group would continue to dominate Guyana's oil industry

in the coming years.

CONTRACTS TO COME

The government and the Exxon consortium have yet to agree

terms for exploring another area the group won in the 2023

auction, he added.

The consortium and the government recently reached an

agreement on a portion of Stabroek to be returned to the

government this year, Bharrat said. The areas are scattered

across the block, however, so they might need to be delimited

again to be reoffered in the future, he added.

The government is forecasting average oil output of 675,000

bpd this year versus 616,000 bpd in 2024. Guyana expects to

receive one or two cargoes this year as a share of oil produced

at Exxon's fourth floating output facility, which is expected to

begin production in the third quarter, the minister said.

Guyana last year became Latin America's fifth largest crude

exporter after Brazil, Mexico, Venezuela and Colombia.