Sept. 21 (oilnow.gy) Guyana’s first competitive offshore licensing round attracted global energy companies and tested stronger fiscal terms. However, the government will need to improve the speed, certainty, and data supporting the process before offering more blocks.
The government has indicated an interest in another licensing round as it seeks to widen exploration beyond the ExxonMobil-led Stabroek Block.
S&P Global assessed Guyana favorably across most indicators used to measure upstream investment conditions. These included political stability, government take, access to data, and available resources. Licensing speed was the exception.
Guyana launched its first auction in December 2022, offering 14 shallow- and deepwater blocks. Bids were initially due on April 14, 2023, with awards expected by May 31 that year.
The deadlines changed several times as the government completed the Petroleum Activities Act and model production sharing agreements. Bidding eventually closed in September 2023, when the government received offers for eight blocks. The first agreement from the round was not signed until November 2025. TotalEnergies, QatarEnergy, and PETRONAS secured shallow-water Block S4 under a five-year production sharing agreement.
The delay provides the clearest lesson for another auction. Guyana should settle the legal, fiscal, and contractual framework before bidding begins. Companies need final rules when assessing acreage and preparing work programs. Changes during an auction can delay decisions and force bidders to revise their proposals.
The government should also publish a firm schedule for bidding, evaluation, negotiations, awards, and license issuance. Extensions should be limited to circumstances that materially affect the process.
Speed should not replace due diligence. Deepwater exploration requires companies with strong finances, technical experience, and credible health, safety, and environmental systems. Clear qualification requirements would allow those checks to be completed without prolonged negotiations.
The six blocks that received no bids also require examination. Limited geological information, water depth, block size, signature bonuses, and minimum work commitments can influence interest.
Guyana is already addressing the data gap. In March, the government signed an agreement with Viridien and BGP to conduct a multi-client 3D seismic acquisition and imaging program covering up to 25,000 square kilometers offshore.
The survey targets a largely unexplored section of the Guyana basin. Its purpose is to improve subsurface imaging, reduce geological uncertainty, and give companies better information when making exploration decisions.
This could strengthen another auction if the data are processed and made available before companies are required to submit bids. Better seismic coverage could also help the government package blocks according to geological prospects instead of relying mainly on geographic boundaries.
Fiscal balance will remain important. The first round includes a 10% royalty, a 10% corporate tax, a 65% cost-recovery ceiling, and equal sharing of profit oil.
S&P found that the terms reduced investor returns compared with the Stabroek Block agreement but remained competitive regionally. The first round also required minimum signature bonuses of US$10 million for shallow-water blocks and US$20 million for deepwater acreage.
By Shikema Deyand
Brazil Energy Insight 
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