TotalEnergies Consortium among four oil companies accepting new PSA

TotalEnergies Consortium among four oil companies accepting new PSA

The TotalEnergies Consortium, which includes Qatar Energy and Petronas, is among four companies that have accepted the new Production Sharing Agreement (PSA), the Ministry of Natural Resources has disclosed, while providing an update on the process of awarding eight of the country’s lucrative offshore oil blocks to the six successful bidders. 

The International Group Investment Inc, Cybele Energy Limited and Delcorp Inc are the other companies that have also accepted the Production Sharing Agreement.

According to the Natural Resources Ministry, Cybele Energy Limited, Delcorp Inc and the TotalEnergies Group are in the final stages of the review process. 

 Meanwhile, ExxonMobil and its partners Hess and CNOOC have not accepted the new PSA, and are currently reviewing it. 

ExxonMobil Guyana President Alistair Routledge, at a recent press conference, told reporters that Exxon and its partners were still locked in discussions with the Government on the S8 Block.

“Yes, the S8 Block we continue discussions with the government on the terms. I really don’t want to get in specifics on that as it is an ongoing discussion. But I would say when we are ready and we concluded something with the government, we will let you know,” Routledge said. 

Exxon has long expressed concern about the non-fiscal terms in the PSA. 

Meanwhile, the Government is still awaiting a response from Sispro Inc, the lone Guyanese company which was awarded two Blocks, on the proposed Production Sharing Agreement.  

In June, the Vice President said some of the bidders had difficulties meeting the criteria set out in the PSA, including the substantial fees, and are in search of new partners. 

These challenges, he said, have stalled negotiations. 

Mr. Jagdeo had also stated that if the bidders are unable to meet the criteria set out in the new PSA, the Government may very well have to abandon the process. 

Under the new model PSA, the royalty on all petroleum produced and sold by the contractor has been increased from 2%, as embedded in the Stabroek Block PSA, to 10%. It includes the retention of the 50-50 profit-sharing after cost recovery. However, a company would not be able to recover more than 65% of the cost at a time.

The Government has signaled its intention to host another bid round for its offshore blocks, but with no agreement signed to date from the first auction, is it unclear, when the other round will begin.

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