Guyana anticipates finalizing an oil production-sharing agreement with a consortium led by France's TotalEnergies, allowing exploration of an offshore area, as Energy Minister Vickram Bharrat informed Reuters.
Guyana, currently the world's fastest-growing oil producer, is poised to achieve a daily capacity of 940,000 barrels this year, nearly 1% of global supply, up from last year's output of 616,000 bpd, all produced by a consortium led by U.S. major Exxon Mobil.
In efforts to diversify the sector, the government awarded TotalEnergies's consortium a block through an auction in 2023. Additionally, Bharrat mentioned that besides the agreement with TotalEnergies, at least three other contracts for exploration blocks awarded in the same auction are expected to be signed this year.
Exploring opportunities for an offshore block where oil discoveries were made by a consortium of Toronto-listed Frontera Energy and CGX Energy, Guyana is considering different options. The Corentyne block, a potential area for development following Exxon's successes, has seen Frontera and CGX's license expire. Disputes over the license cancellation are ongoing.
Addressing challenges faced by the Frontera and CGX consortium, including delays in completing mandatory exploration programs due to capacity and financial constraints, the government is considering reopening bidding or engaging directly with interested parties. Despite this, Exxon is likely to maintain dominance in Guyana’s oil industry in the foreseeable future.
Notably, the government and the Exxon consortium have yet to reach terms for exploring another area won in the 2023 auction. The government forecasts an average oil output of 675,000 bpd this year compared to 616,000 bpd in 2024 and anticipates receiving oil shares from Exxon's fourth floating output facility starting production in the third quarter.
Guyana, after Brazil, Mexico, Venezuela, and Colombia, became the second-largest crude exporter in Latin America last year.