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CGX gives up 25% of concessions; to drill well in 2019
CGX Chairman, Professor Suresh Narine
Canadian-owned CGX Energy Inc., which failed in its first offshore oil well in 2012, is looking at another shot, amid high interest in Guyana’s waters.
Yesterday, the company, which faced significant debts following that one attempt, announced that it has successfully renegotiated its work commitments for the Demerara, Corentyne and Berbice Petroleum Prospecting Licenses with the Government of Guyana.
“As part of the renegotiation, the company has also agreed to relinquish 25% of the acreage of both the Corentyne and Demerara blocks to the Government of Guyana,” the company revealed.
The company promises to drill an exploration well by November 27th, 2019; acquire additional seismic or conduct seismic reprocessing by November 27, 2020 with another exploratory well in the Corentyne block by 2022.
In the Demerara block, CGX says it will complete any additional data processing and planning, and secure all regulatory approvals for the drilling of an exploration well by February 12, 2020.
In this block, an exploration well will be drilled by February 12, 2021, with another planned for two years later.
In the Berbice block, it is the intention to complete a geo-chemical survey of a minimum area of 120 square kilometres and commence a seismic programme defined by the survey, by February 12, 2020.
In this area, the company wants to drill an exploration well by February 12, 2023.
In total therefore, between 2019 and 2023, the company wants to drill six wells.
CGX’s Chairman and Executive Director (Guyana), Professor Suresh Narine, said: “CGX Energy thanks the Government of Guyana for its continued partnership and support; we as a company are eager to pursue the new work commitments in this exciting Guyana basin, and in so doing continue our unbroken commitment to the basin, the Guyanese people and its Government for more than 18 years.”
Narine was named new Chairman in a major shakeup in 2012. The Eagle-1 well was initially budgeted for 60 days of drilling, but experienced weather delays and mechanical issues which extended operations for an additional 30 days.
“The initial cost estimate for the Eagle-1 well was $55 million. However with the delays, the Eagle-1 well is now estimated to cost $71 million. As a result, the company will need to raise approximately $20 million in the near term.”
The disappointing drill results would have come almost 12 years after Suriname controversially ejected a CGX rig in June 2000 off Corentyne, sparking a diplomatic spat that ended up with the United Nations, where an award was made, paving the way for Guyana to restart its oil exploration there.
At the time, Suriname had claimed that the rig was in its territorial waters.
CGX’s announcement comes at a time when Guyana has found almost three billion barrels of high quality oil, via an exploration headed by US-owned ExxonMobil.
Guyana’s waters have since been attracting significant interest, with ExxonMobil set to start production in 2020.
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