CGX eying oil search offshore Essequibo

CGX Energy is moving to extend its exploration for oil offshore of Guyana to the Essequibo region. In Canada last week, it announced that it had entered into a  Letter of Intent to acquire Century (Guyana) Limited’s interest in the Pomeroon Prospecting Licen-ce located offshore  in the Guyana Basin. The release says that the letter is subject to Board, Government and regulatory approvals and the final terms of the sale will be released upon the execution of a Sale and  Purchase agreement and receipt of the required consents. The Guyana government issued the Pomeroon Licence to Century Guyana Limited in November 1997. It is approximately 11,254 sq km (2,781,000 acres) in size and is located between CGX’s 100 percent owned Annex portion of the Corentyne Licence, and the  Plataforma Deltana, located offshore Venezuela.

Water depths in the concession range from 20 to 170 metres. In  this area, significant work commitments and activity have  commenced by a number of multinational oil companies in joint  venture with PDVSA, Venezuela’s state-owned petroleum company.  The northern portion of Century’s concession is on the southern flank of a huge delta system of late Cretaceous to Tertiary age, and includes two hydrocarbon source beds. Century re-interpreted available seismic data on the property, and identified two turbidite targets for drilling. Exploration on the licence has been on standby pending clarification of  maritime boundary issues between Guyana and Venezuela. Century had come under increasing pressure from Venezuela not to engage in exploration and this is believed to be a factor in  its present disinterest in pursuing the licence. Venezuela had also lobbied other potential oil explorers against prospecting  in Guyana’s waters off the Essequibo and this was an issue the government acknowledged it needed to address.

A CGX subsidiary is presently carrying out a seismic survey  onshore adjacent to its offshore concession on the Corentyne Coast in eastern Guyana. Dozens of samples from this exercise are to be sent abroad for testing and this will determine what the company does next. The onshore search is based on a wealth of small finds which indicate that there may be productive wells in the area. In June 2000, armed Surina-mese gunboats  ejected CGX’s oil rig from its drilling position in Guyana’s  waters.  More than three years later, talks between the Guyana and Surinamese governments to arrive at an arrangement to allow  the maritime area in dispute to be jointly exploited and  managed, pending the determination of their maritime border,  are still ongoing. There has been little progress since the  talks commenced. CGX is upbeat about the potential of the area offshore the  Corentyne to yield large quantities of oil.