Guyana to soon sign oil agreement with TotalEnergies-led group
GEORGETOWN, Feb 20 (Reuters) - Guyana expects to soon sign an oil production-sharing agreement with a consortium led by France's TotalEnergies (TTEF.PA), opens new tab 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.N), opens new tab 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 (FEC.TO), opens new tab and CGX Energy (OYL.V), opens new tab 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.
here.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
14 hours ago
- Reuters
Dye & Durham shakes up C-suite with new picks, ignores former CEO's demands
June 2 (Reuters) - Dye & Durham ( opens new tab on Monday announced a dramatic shift in leadership when it named a new chief executive and a new chief financial officer, ignoring demands from a former chief who is also a large investor to pursue a different course. The Canadian legal software maker appointed former LexisNexis executive George Tsivin as chief executive and brought back Avjit Kamboj to reprise his role as chief financial officer. It also hired Nikesh Patel as chief product officer. "After an in-depth and diligent search, we have assembled a world-class leadership team to guide the company through its next chapter," board chair Arnaud Ajdler said in a statement. Kamboj, who left Dye & Durham in 2022, guided the company's financial strategy during its initial public offering and significant growth stages. The announcement comes two weeks after a former Dye & Durham CEO, Matthew Proud, urged the company to stop searching for a new chief and permanently hand the job to the man doing it already in an interim capacity. More importantly, Proud, whose company Plantro Ltd controls 12% of Dye & Durham, urged a board refresh and is pushing the company to divest the financial services division and then begin work on selling the remaining core business. He also said he is ready to call a special shareholder meeting unless the board considers the changes he is proposing. He stepped down from the CEO position six months ago. Dye & Durham's financial performance has worsened, Proud said on Monday, as earnings have dropped against a backdrop of higher costs and flat revenue. The company has not publicly responded to Proud's criticisms. The company last month reported third quarter fiscal 2025 earnings and its stock price tumbled 50% in the last six months, valuing the company at roughly $490 million. The stock price fell nearly 2% in early trading on Monday. At December's annual meeting, activist investor Engine Capital, run by Ajdler, won control of the board through a proxy fight.
Reuters
16 hours ago
- Reuters
Britain facing race to avoid $1 billion in EU carbon tax costs
LONDON/BRUSSELS, June 2 (Reuters) - Britain will struggle to link its carbon market to the EU's in just seven months, to avoid UK companies facing the bloc's carbon border tariff and annual bills around 800 million pounds ($1.08 billion) from next year, market experts have said. Billed as part of a "reset" in relations after Britain's 2016 exit from the European Union, the two sides announced last month they will link their carbon emissions trading systems by the end of the year. But neither side has set a timeframe or detailed the work that must be done to make this happen before January, when Europe's carbon border tax kicks in. "It's probably still likely to take many years before linkage takes effect. The earliest is 2028, but it's more likely to be 2029 or even 2030," said Ben Lee, senior emissions analyst at Energy Aspects. The UK government said a key upside of linking to the EU's carbon market, or emissions trading system (ETS), is to avoid businesses being hit by the EU's carbon border tariff - which, starting next year, will impose fees on the CO2 emissions associated with imports of steel, cement and other goods. The UK government said avoiding these costs would save 800 million pound a year. But EU officials say to get exempted from the carbon border levy, Britain would need to have linked its carbon market to the EU's. "Full linkage will take several years given the complexity of the process, purely from a technical perspective," ClearBlue carbon market analyst Yan Qin said, adding that an "optimistic" scenario could see the link forged in 2027. A spokesperson for the British government said it will seek to agree a carbon market link as soon as is feasible. "We will not provide a running commentary on the progress of negotiations," they said. To make a link happen, the UK needs to adjust its national rules for issuing carbon trading permits, bring its emissions permit auctions in line with EU rules, and change its national cap on how much companies covered by the carbon market can emit. That's not all. The EU and UK schemes are also not yet aligned on how many free CO2 permits they give industries. And the EU carbon market has a special "reserve" which adds or removes permits from the market to help stabilise prices. Britain's scheme currently lacks a "reserve", though it has a cost containment mechanism that can act as a ceiling on prices, something the EU scheme does not have. "Resolving the question of a supply adjustment mechanism will likely be one of the technical calibrations that will need to be in place before the two systems can link," said Veyt senior analyst Ingvild Sorhus. Some businesses argue these issues are technically straightforward to resolve. "With the right political will, an ETS linking agreement between the EU and UK could be signed within 6 months, and operational by 2028," said Alistair McGirr, Head of Policy and Advocacy at British energy firm SSE. Industry group Energy UK said linkage negotiations could conclude within a year - but that Britain should seek an exemption from the EU carbon border levy until the link is sealed, in case talks drag into 2026. "It is a question not of major political roadblocks, but primarily of technical processes ... I'm not saying these are small problems, but they are simply not intractable problems," Energy UK Policy Director Adam Berman said, of the changes needed to allow the link. The UK plans to launch its own carbon border tariff a year later, in 2027. Brussels may be in less of a hurry. Britain's carbon market is less than a tenth of the size of the EU's, so a link would see British businesses gain access to a much more liquid market. The upside for the EU is less clear - although EU officials cite the bloc's aim to expand carbon pricing internationally, to ensure as many countries as possible put a price on greenhouse gas emissions. Companies also say the move would avoiding competitive distortions and reduce costs for both EU and UK consumers. Pascal Canfin, a French lawmaker in the European Parliament, said the upsides for Britain were more obvious than for the EU. "It's a political move," said Canfin, of the EU's motivation. "The UK was within [the EU] ETS before. I mean, it's not such a big deal to have it again." ($1 = 0.7387 pounds)
Reuters
16 hours ago
- Reuters
Canada factory PMI rises in May but sector remains in contraction
TORONTO, June 2 (Reuters) - Canadian manufacturing activity contracted for a fourth straight month in May as trade uncertainty led to firms shedding workers at the fastest pace since shortly after the start of the COVID-19 pandemic, data on Monday showed. The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) edged up to 46.1 in May from 45.3 in April but was stuck below the 50 no-change level for the fourth straight month. A reading below 50 indicates contraction in the sector. 'With manufacturers continuing to be hit by tariffs and trade uncertainty, May saw the sector experience a further significant contraction," Paul Smith, economics director at S&P Global Market Intelligence, said in a statement. "The hard to predict nature of trade policies means the outlook for production remains extremely uncertain and given the recent scale of the downturn in the sector, job losses are mounting." The employment component fell to 44.9 from 47.6 in April, marking the lowest level since June 2020, while measures of output and new orders also remained in contraction. Canada sends about 75% of its exports to the United States, including steel, aluminum and autos which have been hit with hefty U.S. duties. Retaliatory tariffs have been imposed on some U.S. goods. 'Unsurprisingly, tariffs remain the primary source of price pressures, whilst also leading to an intensification of supply side delays," Smith said. The measure of input prices rose to 63.5 from 62.1 in April, leaving it just below the 31-month peak it touched in March, while the average lead times for the delivery of inputs lengthened for an 11th straight month. The deterioration in vendor performance was linked to port congestion and challenges at customs. The Future Output Index edged up to 50.9 from 50.4 in April, with some firms hopeful that government policies could help stabilize the macroeconomic environment, but was well below the survey's historical norm, S&P Global said. Canadian Prime Minister Mark Carney, whose Liberal Party retained power in an April election, has proposed sweeping changes to boost economic growth.
