CGX Energy has completed what has been a months-long process to relinquish its stake in the Demerara and Berbice Blocks, a decision that the company says will allow “other interested parties” to explore for oil in those blocks.
This was made known in the company’s recent financial filings. According to CGX, which has partnered with Frontera Energy, the Government had provided them with a surrender deed in September 2022 for the relinquishment of the Berbice Block. That surrender deed has since been signed and finalised, formally bringing an end to their hold on the block.
“The Company, through its 62 per cent owned subsidiary ON Energy Inc., acquired the Berbice PA in October 2003. On September 20, 2022, the Government of Guyana provided ON Energy with a surrender deed to formalize the relinquishment of the Berbice block.”
“ON Energy signed the surrender deed of the Berbice PPL, which has now been finalized. The Company’s relinquishment of the block allows the people of Guyana to benefit from exploration activities under the stewardship of other interested parties,” CGX said in their financials.
When it comes to the Demerara Block, CGX explained that it also received a surrender deed for the Petroleum Prospecting Licence (PPL) on the same day as the Berbice Block. According to the Canadian company, they also signed this deed and have since finalised the relinquishment of the Demerara Block.
Another development the company made known is that it has submitted its proposal to relinquish 25 per cent of the Corentyne Block, to the Ministry of Natural Resources and the Guyana Geology and Mines Commission (GGMC). According to CGX, they are now awaiting the agreement of these agencies, to finalise the relinquishment.
“On January 23, 2023, the Joint Venture announced the spud of the Wei-1 well, approximately 200 kilometres offshore from Georgetown, Guyana. The Joint Venture also announces that the Government of Guyana approved an Appraisal Plan for the northern section of the Corentyne Block which commenced with the Wei-1 well.”
“Following completion of Wei-1 drilling operations and upon detailed analysis of the results, the Joint Venture may consider future wells per its appraisal program to evaluate possible development feasibility in the Kawa-1 discovery area and throughout the northern section of the Corentyne block,” CGX further explained.
According to the company, any future drilling will depend on positive results at Wei-1. As it stands now, the partners have no further drilling obligations beyond the Wei-1 well. The appraisal programme was approved for a period of 24 months from June 29, 2022, to June 28, 2024.
Only last July, CGX underwent a major shakeup in management. These changes included the naming of a new Chief Financial Officer (CFO), George Davis, who took over from Hill York Poon. Poon was retained as CGX’s Director of Finance. Meanwhile, Paul Langlois was appointed as the new Exploration Manager.
CGX and Frontera Energy Corporation had previously commissioned an independent report which had revealed that they were potentially sitting on 4.9 million barrels of oil equivalent (BOE) in the Demerara and Corentyne oil blocks under their control.
In February 2022, the partners announced an oil find of 177 feet of oil-bearing reserves at the Kawa-1 well in the Corentyne Block. Since then, however, the company has been making moves to scale back its presence in the other blocks.
It was announced last year that CGX had reached an agreement with the Government to relinquish larger sections of the Demerara and Corentyne Blocks. Both the Corentyne and Demerara Blocks have been in CGX’s hands for some time without being drilled.
Back in May 2019, the Strategic Joint Venture between CGX and Frontera was approved to farm into two shallow-water offshore Petroleum Prospecting Licences for the Corentyne and Demerara Blocks. These blocks are adjacent to ExxonMobil’s oil-rich Stabroek Block, where multiple discoveries have been made.
