Govt. under no pressure to make decision on CGX - Jagdeo

Govt. under no pressure to make decision on CGX – Jagdeo

Aug 30, 2024 News

Kaieteur News – Vice President (VP) Bharrat Jagdeo said that the government is under no pressure to make a decision in relation to extending CGX Energy’s exploration license which has already expired.

Vice President, Dr. Bharrat Jagdeo

The VP was asked by the media to provide “an update on CGX’s notice of potential interest in its Corentyne Block discovery.” Jagdeo said that, “the minister made it clear that right now they do not have a license. He said that to you they do not have…So we are under no pressure because that’s the situation as of now. It’s not like the renewal of a license dependent on our decision. They do not have a license at this stage. I think he made that clear at the meeting and so we are under no pressure to make a decision now.”

He further explained that he had not been to cabinet in a while but he is guessing the issue will come up there eventually. “The cabinet started the discussions they (CGX) were supposed to provide more information to the cabinet. I guess when that goes there they will make a decision and then you will be notified,” he stated.

The VP said that the company was asked whether they have come up with a partner or the money to invest but they have so far not provided satisfactory answers. “The Minister of Natural Resources met with them asked them a number of questions and I think he reported that to the government.”

At a previous media conference Jagdeo had said that cabinet is highly unlikely to extend the exploration license granted to CGX Energy Inc. and Frontera Energy Corporation, who are joint venture partners in the Corentyne Block offshore Guyana. “Cabinet is not inclined to grant an extension to the license,” he said then.

He emphasised that while the company had been given some time to return with further updates, the information provided so far was insufficient. “We are not inclined to give any extension but [Cabinet] still wants some additional information,” he added.

In December of 2023 this publication reported that CGX Energy Inc. and Frontera Energy Corporation joint venture partners have announced their plans to initiate oil production by 2030 in the Corentyne Block offshore Guyana. This goal is based on an estimate that the northern Corentyne area holds between 514 and 628 million barrels of oil equivalent (mmboe) in prospective resources, as discussed in a virtual informational presentation last week.

Gabriel de Alba, Chairman of Frontera’s Board of Directors and Co-Chairman of CGX’s Board of Directors, noted that the estimate is confined to one zone of the block.

“The Joint Venture believes that approximately 514 to 628 mmboe PMean unrisked gross prospective resources may be present in the Maastrichtian horizons alone,” de Alba said. He therefore noted the possibility of additional resources in the deeper Campanian and Santonian geological horizons. However, the joint venture is treating the Maastricthian as a priority zone.

The news release also clarified that the estimate considers those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. This means the estimate is not purely proven barrels in the Kawa-1 and Wei-1 wells, but it is inclusive of unproven barrels from prospects yet to be drilled.

CGX and Frontera have been working to find sufficient resources to support a standalone commercial oil development, following ExxonMobil’s successes. The partners are actively pursuing options for a potential farm-down of their interests, to bring in a new partner, with advisory support from Houlihan Lokey.

However in June of this year it the Vice President had warned the companies that it was “crunch time”. In response to a last-minute Notice of Potential Commercial Interest filed for the Wei-1 Well located in the Corentyne Block, on June 26, just days ahead of the June 28 deadline for the Corentyne Block’s appraisal programme, Jagdeo underscored that stringent conditions must be met to retain the block.

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