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Tuesday, April 13, 2021

No drill date yet from CGX for Corentyne block

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Even though it has identified a high-grade lead in the northern region of the Corentyne block, CGX Resources Inc. has not yet indicated when it will commence a drilling programme. In its quarterly highlights for the period ended June 30, 2020, CGX Resources which is the operator of the offshore concession under a Joint Operating Agreement (JOA) with Frontera Energy Guyana Corp. (FEGC), noted that it has its sight set on the Kawa well which is a Santonian level, stratigraphic trap and is interpreted to be analogous to the discoveries immediately to the east on Block 58 in Suriname.

The company said that other leads are being evaluated and are interpreted to be situated at the same geological horizons as the nearby significant discoveries already proven in the Stabroek Block and Block 58. CGX said that the leads are located in water depths ranging from approximately 500 to 3,600 feet and are estimated to be at a drilling depth of between approximately 11,000 to 21,700 feet.

While CGX appears thrilled about the proximity of its next lead to discoveries in the Guyana-Suriname basin, it is still to appease the concerns of local authorities regarding its poor performance on the block. Just last month, Vice President Dr. Bharrat Jagdeo would have expressed worry over the fact that CGX has done little exploratory works on not only the Corentyne concession but the Demerara block as well.  In spite of the alarm that was raised, CGX has said nothing to date about how it intends to improve performance.

CGX’s first attempt at exploratory works on the Corentyne block began in 2000, two years after it was awarded the licence for the block by the Guyana Government. Those efforts were subsequently thwarted after Surinamese naval gunboats forced a jack-up rig to remove from the Eagle-1 well.

According to the records of the Guyana-Extractive Industries Transparency Initiative (GY-EITI), legal proceedings were initiated at the International Tribunal on the Law of the Sea (ITLOS) to resolve the maritime border dispute with Suriname and in 2007, the Tribunal awarded Guyana at least 93% of the disputed area. Following this, CGX was awarded a Petroleum Licence for the Corentyne Block on November 27, 2012. On February 13, 2013, it acquired a Licence for the Demerara Block.

One well – the Jaguar-1 – was drilled in February 2012 on the Corentyne block but was subsequently abandoned due to safety concerns. Another well, the Eagle-1, was drilled months later, but the results were disappointing.

Further to this, in September 2019, CGX had announced that it had deferred all of its operational obligations under a drilling rig contract it had entered for its planned campaign on the Corentyne Block. This was due to the re-sequencing of its work programme. Initially, the company intended to drill one exploration well on the Corentyne block – Utakwaaka-1 – and then follow that up with seismic processing. CGX instead moved to first execute the seismic survey over the northern region of the block. The Utakwaaka well was required to be drilled next but this never occurred. CGX updated its work programme again as it identified other prospects with more potential. Again, no drilling date was ever disclosed.

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