The Ministry of Natural Resources has rejected a Kaieteur News article published on November 21, 2025, which claimed that the new petroleum agreement for Block S4 leaves a loophole allowing TotalEnergies, Qatar Energy and Petronas to recover royalty payments owed to Guyana. According to the Ministry, this conclusion is “inaccurate and uninformed,” since royalties are not cost-recoverable unless a petroleum agreement specifically states otherwise, and no such provision exists in the Block S4 deal.
The Ministry explained that cost-recoverable expenses are limited to costs directly tied to petroleum operations, which are repaid from cost oil. Article 35.2 of the agreement outlines what qualifies, and the Petroleum Activities Act of 2023 further defines petroleum operations, from exploration and production to environmental protection and transportation. Royalty, the Ministry stressed, is not an operational cost. It is a fiscal obligation paid to the State before production is divided between cost oil and profit oil, and because of that, it cannot be recovered. The Ministry pointed out that royalty is not listed among the recoverable cost categories in Annex C of the agreement.
The release noted that back in 2019, when Guyana was new to oil production, there had been uncertainty about whether royalty could be recovered, prompting an addendum to clarify the matter. Since then, with more experience in the sector, it is well understood that royalty payments are not recoverable unless an agreement expressly allows it.
The Ministry said the only issue Kaieteur News identified in its review of the new agreement is one that simply does not exist, and highlighted that the newspaper itself acknowledged that other concerns tied to the 2016 agreement have been resolved in this updated version. The statement also criticised Kaieteur News’ reporting on the oil and gas sector, describing it as repetitive and lacking in new insight, despite the Government’s continued explanations and clarifications.
The Ministry reaffirmed that it remains committed to providing timely and comprehensive updates on the management of the oil and gas sector for the benefit of all Guyanese.
