Guyana wants to offer the Corentyne acreage to another operator after it finally cancels the license of the CGX Energy and Frontera Energy group.
Minister of Natural Resources Vickram Bharrat told Reuters the block, where CGX discovered oil and gas, could still be the location of the first development outside of the prolific Stabroek Block where ExxonMobil has found over 11 billion barrels of oil equivalent.
The Guyana government is preparing to cancel CGX and Frontera’s license, giving the joint venture a window of time to make arguments against the position that the license period has run out.
“Once it’s completely cleared, I think there will be a lot of companies interested in it,” Reuters reported Bharrat as saying. The government could open a bidding round to reoffer the block or negotiate directly with interested parties, Bharrat reportedly said.
The Minister told the publication Guyana has been very lenient and helpful with CGX, while saying there is a limit to what it can do. The government, under the current and immediate past administrations, has shown leniency to CGX and Frontera when they had trouble fulfilling their work program in the past, within timeframes they committed to.
In 2022, a CGX subsidiary agreed with the Guyana government to relinquish the Berbice Block, while CGX and Frontera agreed to relinquish the Demerara Block. At the time, Vice President Bharrat Jagdeo had said it is “none of our business” if CGX is not able to come up with the funds to do its work.
“There’s only so much we can bend… without breaking our laws. And there was no legal ground for me to extend (the license),” Bharrat told Reuters.
CGX discovered oil and gas in the 2022-2023 period and got a two-year extension to conduct appraisal work on its Kawa-1 discovery before its petroleum agreement was due to run out in 2022. The company applied for another two years to appraise its Wei-1 discovery before the expiry of its petroleum agreement in 2024, but the government did not approve the request.
“It’s both a capacity and a financial problem,” Bharrat said about CGX and Frontera.
Earlier this month, the companies said the government wrote them. In turn, they sent a letter disputing the cancellation to the government, Bharrat said, which means the case could go to court, according to Reuters.
“We have been very lenient with CGX, very helpful to them like we are with any company investing in Guyana, but there’s a limit too,” Bharrat is quoted as saying.
