CGX Energy and its joint venture partner Frontera Energy have contested the Guyana government’s move to terminate their license for the Corentyne Block. CGX in a release on Monday argued that the agreement remains “valid and in force.”
The partners, who have invested in oil exploration off Guyana’s coast, said the Guyana government has taken contradictory positions on the status of the Petroleum Prospecting License and Petroleum Agreement CGX held. They also disputed the legal grounds for the reported cancellation.
“The Joint Venture remains firmly of the view that its interests in, and the License for, the Corentyne Block remain in place and in good standing and the Petroleum Agreement has not been terminated,” CGX said. It added that it is assessing legal options to assert its rights.
The statement follows the Guyana government’s announcement that it is preparing to cancel the joint venture’s license, which was due to expire in 2024. Minister of Natural Resources Vickram Bharrat told Reuters last week that CGX and Frontera were given time to make their case before the government finalizes its decision. The group said the government told them the license will cease to have effect on March 10.
The companies had previously sought another extension to appraise their Wei-1 discovery, but the government declined the request, citing a lack of legal grounds for further leniency.
CGX and Frontera made oil and gas discoveries at the Corentyne Block in 2022 and 2023 but have faced financial and capacity constraints in advancing development. The government has said it was supportive of the companies’ work in Guyana but could only extend their license so far without breaching its laws. Bharrat told Reuters that once the matter is settled, the block could be reoffered through a bidding process or direct negotiations.
Despite the government’s position, CGX and Frontera said they are committed to “expeditiously resolving this matter” and advancing development in Guyana. The standoff could escalate into an arbitration battle.
The Corentyne Block has been eyed as the best chance for an oil and gas development outside of the ExxonMobil-operated Stabroek Block. Bharrat said Corentyne could still be developed, just not by CGX and Frontera.
