Latest update June 18th, 2025 3:09 PM
Minister Bharrat orders CGX to honour 2022 work commitments on Demerara, Berbice Blocks
Map showing the onshore and offshore locations of CGX’s Corentyne, Berbice and Demerara blocks.
Natural Resources Minister, Vickram Bharrat
Kaieteur News – Given its positive findings of hydrocarbons at the Kawa-1 well in the Corentyne Block, CGX Energy Inc. told the market last month that it would seek to explore more of the opportunities in that offshore concession instead of going through with commitments this year on its other two blocks—Demerara and Berbice.
In fact, CGX in its latest financial report said that it would not engage in drilling activities on the Demerara block in 2022. However, on February 21, 2022, the Minister of Natural Resources, Vickram Bharrat informed CGX which is a partner on the block with Frontera Energy Corporation, that two commitment exploration wells must be drilled on the Demerara Block per the terms of the Demerara Petroleum Prospecting Licence and associated Petroleum Agreement prior to February 12, 2023. CGX said it will nonetheless seek further dialogue with the Ministry of Natural Resources regarding this order.
On February 4, 2022, the company, through its 62 percent owned subsidiary ON Energy Inc. had notified the Ministry of Natural Resources that, given the focus on developing the Corentyne Block, as well as operational considerations and investment priorities, ON Energy would be unable to drill an exploration well on the Berbice Block in 2022 and proposed that seismic acquisition on the block be shifted to commence in January 2023. Once again, Minister Bharrat stood his ground and informed ON Energy that he expects the company to drill one exploration well on the Berbice Block and acquire seismic on the block prior to the expiry of the Berbice Petroleum Prospecting Licence and associated Petroleum Agreement. CGX still insisted that it will seek further dialogue with the Ministry of Natural resources regarding this guidance.
It was on February 12, 2013 that the Government of Guyana had issued the new Demerara Petroleum Agreement (PA) and Petroleum Prospecting Licence (PPL) to the Company. Under the terms of the new Demerara PA, during the initial period of four years, CGX has an obligation to conduct a 3D seismic survey of a minimum of 1,000 km2 (completed in 2014) and to drill at least one exploration well.
The Demerara Licence (formerly the Annex Licence) comprises approximately 1.0 million acres (3,975 square kilometres) offshore Guyana. Kaieteur News understands that CGX has 3,400 sq. km of vintage seismic data on the Demerara which was acquired prior to 1998. After processing about 250 km, CGX had identified two leads—a toe thrust on line 31 and an amplitude lead on the intersection of line 4 and line 25. New 3D seismic will be required to advance these targets to a drillable stage.
In 2003, CGX, through its 62 percent owned subsidiary ON Energy, had applied for and was granted the Berbice Petroleum Prospecting Licence consisting of approximately 1,566.2 km2.
On December 15, 2017, the company was issued an addendum to the February 12, 2013 PA. Under the terms of the new Berbice PA, during phase two of the first renewal period beginning on August 12, 2018, the company was expected to complete a geochemical survey of a minimum 120 sq km and commence a seismic programme defined by the geochemical survey. At the end of the first renewal period of three years, the company had a choice to elect either to relinquish the entire contract area except for any discovery area and the area contained in any PPL or relinquish 25 percent of the contract area and renew the PPL for a second period of three years. It had successfully secured a renewal but with a restructured work programme which the Minister has insisted, must be completed.
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