Guyana’s petroleum industry is built around Production Sharing Agreements (PSAs), but the agreements between the companies operating together in an offshore block can be just as consequential when it comes to how projects are actually managed.
These agreements are generally known as Joint Operating Agreements, or JOAs.
The distinction became particularly significant during Chevron’s proposed acquisition of Hess Corporation, which included Hess’s 30% participating interest in Guyana’s Stabroek Block.
While the PSA establishes the legal and commercial relationship between the Government of Guyana and the petroleum contractor, a JOA governs important aspects of the relationship among the companies participating in the petroleum venture.
The Stabroek Block is a clear example.
ExxonMobil affiliate Esso Exploration and Production Guyana Limited is the operator, while ExxonMobil, Chevron’ and CNOOC hold participating interests of 45%, 30% and 25%, respectively.
The companies are separate corporate entities, even though they participate together in the same petroleum venture.
Their relationship therefore requires a separate set of rules covering issues such as operatorship, decision-making, expenditure, cost allocation, liabilities and transfers of participating interests.
Guyana’s model deepwater petroleum agreement recognises this structure. The PSA provides for an operator to conduct petroleum operations on behalf of the contractor and requires a certified copy of the joint operating agreement between the operator and the other participating companies to be provided to the government.
The operator has significant responsibilities under that arrangement, including conducting petroleum operations and entering into contracts and commitments on behalf of the contractor.
At the same time, the participating companies retain their respective interests and obligations under the petroleum agreement.
In practical terms, that creates several layers of responsibility around an offshore project.
Guyana deals with the contractor through the PSA.
The participating companies establish their working relationship through the JOA and related agreements.
The operator conducts the petroleum operations.
And the government and relevant regulators oversee compliance with Guyana’s laws and the terms of the petroleum agreement.
The importance of those contractual relationships became particularly visible when Chevron agreed to acquire Hess.
ExxonMobil and CNOOC challenged the transaction, arguing that their contractual rights under the Stabroek Block arrangements gave them a right to match the proposed transfer of Hess’s interest.
The dispute ultimately reached the courts and became a major international test of the rights attached to participating interests in the Guyana block.
Chevron completed its acquisition of Hess in July 2025 after the legal dispute was resolved, giving Chevron Hess’s 30% interest in the Stabroek Block.
The episode demonstrated that an interest in an oil block is not simply a percentage of production.
It comes with a package of contractual rights, obligations and decision-making arrangements that can have major commercial consequences.
The same basic principle applies across Guyana’s offshore petroleum sector.
The Ministry of Natural Resources publishes petroleum agreements covering blocks including Stabroek, Kanuku, Orinduik, Kaieteur, Canje, Corentyne, Berbice, Roraima and Demerara.
The ownership structures and participating companies differ between blocks, meaning the contractual relationships behind those projects can also differ.
This is becoming increasingly important as Guyana’s petroleum industry expands.
The country has moved well beyond the early exploration phase. It now has multiple producing FPSOs, several additional developments under construction or planning, major exploration programmes and billions of dollars committed to offshore infrastructure.
Those investments make the agreements governing relationships between participating companies increasingly important.
Questions about who operates a block, who funds particular expenditures, how major decisions are approved, how costs are allocated and what happens when a company wants to transfer its interest can directly affect the development of an oil project.
They can also become matters of national interest when a change in ownership brings a new company into a petroleum venture.
The PSA remains the central agreement between the State and the petroleum contractor and sets out the framework under which petroleum resources are explored, developed and produced.
But behind that agreement are contractual arrangements between the companies themselves that determine how they operate together.
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