A consortium led by TotalEnergies, in partnership with Petronas and Qatar Energy, has emerged as the only winning bidder to have passed the Cabinet approval stage in Guyana’s inaugural oil block bid round.
This was announced by Dr. Bharrat Jagdeo, General Secretary (GS) of the People’s Progressive Party (PPP), during his press conference on Thursday afternoon.
In the recent oil block auction, 14 blocks were offered, and eight attracted significant interest from both local and international companies. The consortium has been awarded the shallow water – S4.
On Thursday afternoon, Dr Jagdeo confirmed that this group has successfully cleared Cabinet approval and is moving forward. However, he advised reporters to contact Minister of Natural Resources, Vickram Bharrat, for further details on the current stage of the process.
Dr Jagdeo noted that while the Total-led consortium has progressed, other bidders are encountering challenges, particularly with the fiscal terms of the Production Sharing Agreement (PSA).
“Most of the others are still in discussions on the PSA because a lot of them have either issue with the PSA, the legal terms,” he noted. Dr Jagdeo reiterated that the government has made it clear that the fiscal terms will remain largely unchanged, with some potential for minor adjustments during the negotiations.
Under the new PSA, Guyana stands to gain substantial benefits, including a US$20 million signature bonus for deep-water blocks and US$10 million for shallow-water blocks. Additionally, there is a fixed 10% royalty rate, a 10% corporate tax, and a lowered cost recovery ceiling of 65%, down from the previous 75%.
Moreover, the GS acknowledged the concerns of some bidders about the rigidity of the terms, stating, “There are saying it’s too rigid…Some are still looking for partners and operators because (of)the original submission, they couldn’t conclude those, so unless those issues are dealt with before hand in the negotiations, it’s not going to go to cabinet.”
