Monday, August 8, 2022

Government wants CGX to carry out work commitments on Berbice, Demerara blocks

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During the wave of excitement CGX Energy Inc. and its Canadian joint venture partner, Frontera Energy Corporation, created with respect to the Kawa-1 discovery on the Corentyne Block, the explorers indicated that they would be looking to focus their energies on this concession instead of carrying out other work commitments on the Demerara and Berbice Blocks.

It appears however that the Guyana government has rejected such a course of action and wants CGX to honour its contractual obligations.

According to CGX’s latest financial statements, it said that on February 21, 2022, the Minister of Natural Resources, Vickram Bharrat  informed the joint venture that two commitment exploration wells must be drilled on the Demerara block per the terms of the Demerara Petroleum Prospecting License and associated Petroleum Agreement prior to February 12, 2023. Despite the disappointing news to the company, CGX said it will nonetheless seek further dialogue with the Ministry of Natural Resources regarding this issue.

On February 16, 2021, CGX had told the market that it had identified an Aptian stratigraphic prospect on the Demerara Block, named Makarapan, for the Precambrian Mountain overlooking the Rupununi Savannahs, and the prospect was in the process of being matured to drill-ready status. It had said that additional prospects and leads on the Demerara Block (a total of five) were also being matured by the company.

Further to this, CGX disclosed that on February 4, 2022, through its 62% owned subsidiary ON Energy Inc., it 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 is unable to drill an exploration well on the Berbice Block in 2022. It proposed instead that seismic acquisition on the block be shifted to commence in January 2023.

CGX said it sought the Minister’s guidance on this matter. However, CGX said Mr. Bharrat 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 License and associated Petroleum Agreement.

Be that as it may, the company said it will seek further dialogue with the Ministry of Natural resources regarding this guidance.

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