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Regional News

October 15, 2003
CGX comes ashore in its search for oil
Stabroek News

Offshore Guyana the US Geological Survey (USGS) in 2000 estimated that there is a reserve of some 15 billion barrels of oil in what is called the Guyana Basin , described as “one of the last remaining poorly explored but highly prospective basins”.

Onshore, the Geology and Mines Commission has had reports of oil sightings since the 1800s in the Waini and Baromani areas in the western part of the country and more recently in 1966/67 when Shell reported droplets of oil and tarry substance from a well it drilled in the Berbice River.

The Trinidadian company, Trinidad Lease-holds United, had some decades earlier at Goed Banana Land also recorded droplets of oil and tarry substance as a result of their exploration work.

There was also a report of similar indications from a drill hole, which is now covered by the Repeater Station at Skeldon. There were also similar indications of a tarry substance from an old well in the Shelter Belt Compound on Vlissengen Road.

As late as 1999, there was also the suspicion of the presence of gas in a field behind the Fort Wellington Police Station given the reports of a geyser-like explosion. The Geology and Mines Commission, however, later determined that the explosion was due to marsh gas formed by rotting vegetation.

The reports from the Corentyne area have prompted the Canadian oil company, CGX Energy, to transfer its search for oil onshore pending the resolution of the maritime border between Guyana and its eastern neighbour Suriname. CGX’s onshore concession covers an area stretching from Mara, West Bank Berbice to Skeldon on the Corentyne coast.

To do this it has formed a wholly owned Guyanese subsidiary, On Energy (ONE)Inc. ONE will initially be 20% owned by Guyanese investors, who will have the opportunity to directly share in any discoveries onshore Guyana.

CGX has contracted the Oklahoma-based US company, Geo-Microbial Technologies (GMT) to conduct the geo-chemical sampling using the specialised methodologies it has developed for evaluating the presence of microbes in the soil that feed on trace hydrocarbons escaping along micro-seeps from sub-surface deposits.

John Cullen a director of CGX says, “Local knowledge can be incredibly valuable.” He said that it has pointed to “at least 5 different oil and gas shows on our onshore concession,” according to a CGX release. The release quotes Kerry Sully, CGX’s Chief Executive Officer and Chairman, as saying that the company has discovered that there is a lot of local knowledge about oil and gas seepage on its onshore Berbice Block. After meeting with Staatsolie representatives in February 2003 and learning about their company’s onshore programme Sully said he knew it was time to take a closer look at his company’s onshore block. Since February based on their conversations with people in the area, CGX says “there are many analogies between what’s happening onshore in Guyana and Suriname .” It believes that there is also a lot of local evidence to support its thesis. In Suriname , Staatsolie, the state oil company, is producing 12,000 barrels of oil per day from their Tambaredjo oilfield. Proven reserves are estimated to be 167 million barrels. Since that discovery, Staatsolie have been exploring their 200 kilometre coastline between Tambaredjo and New Nikerie, close to the Guyana border. Using geochemical sampling and geophysics, they have identified a number of anomalous prospects.

Dr Kamal Dookie, a founder and director of CGX Resources, grew up in Guyana . His family originally lived in the Berbice area. Dr Dookie introduced John and Kerry to J P Singh, an incredibly agile and alert man of 90 who runs a cement-block business and is a family friend of the Dookies.

Singh told the group about a drainage canal dug in the ‘30s. “It looked like ‘diesel’ coming out of the ground this high,” said Mr. Singh, raising his arm to knee level. “We had to lay concrete in the bottom of the canal to hold the oil back,” he explained. This could be the location of Trinidad Leasehold United’s activity at Goed Banana Land mentioned above.

Research carried out in Canada led to Warren Workman, CGX’s Vice President Exploration and Director and President of the CGX Guyana subsidiary, ONE spending several days in the Berbice area in July. This time Singh showed Workman and Dookie the canal. “Singh recalled that the oil show occurred in 1932 when the channel was built and he was 19 and working on the project. Remarkable man,” says Workman. At low tide, Dr Dookie returned to the area and saw gas bubbles on both sides of the canal, collaborating the local reports of hydrocarbon seepage in the Skeldon drainage ditch. “Also at Skeldon, Mr. Singh led us to the location of a stratigraphic test well drilled by Shell in 1967 and the local water well” says Kamal. “While Shell’s well was dry, the local water well drilled only 100 feet (30 metres) away had oil and gas shows at 1,450 feet (480 metres)!” In July, Workman also met with Ronald Sangster, agricultural manager for Rose Hall Estate, described by Workman as “a very capable take-charge guy who offered us every courtesy.” Sangster showed Workman the drilling pad at Rose Hall where heavy oil shows were found in the well around 6,000 feet (2000 metres) in 1942. After all of this first-hand evidence from local people, Workman headed to the C. N. Barron Library, named after the pre-eminent geologist of the 20th century in Guyana.

The library has limited information about the Rose Hall well but Workman has requested a geological report with attachments from the British Geological Survey. “However, I discovered C. N. Barron reported an oil-stained sample seep when digging the flag pole foundation in 1966 in the village of Liverpool , 18 miles (11 km) south of New Amsterdam ,” said Workman. “He recovered another sample approximately 70 feet southwest at a depth of the base of the clay. The location is on the north flank of a gravity anomaly.” “I also reviewed the 1967 map of the composite surface geology of Guyana by G.W. Walrond. A basement outcrop was mapped as a Phanerozoic Greenstone (meta-sediment) east of the Berbice River at the Mara settlement,” says Workman. “The fact that Canje River flows parallel to the coast instead of flowing toward it also supports the theory that there is a significant basement high in the area. If it restricts water flow to the coast, it would also form a barrier to hydrocarbon flow further inland, and may also provide the framework for trapping in the sedimentary deposits.”

Further news about oil seeps at Mara caught the attention of Workman and Sully based on a copy of a hand-written letter from Magabar Sawh to Prime Minister Sam Hinds, dated June 20, 2000 . Sawh took inventory at Mara Sugar Estate during the war. The estate was “about 27-30 miles by road from New Amsterdam ” and was owned by Manoel Veira.” Sawh noted “oil and pitch floating on the riverbank” side of the Mara Estate loading dock. “I saw it and Mr. Manoel Veira said to me he should put aside money to drill for oil as soon as the war is over. I am sure oil is there.” This wasn’t the first time Sawh had noticed oil and gas seeps. His letter indicates another show of gas and water farther east during “the biggest dry weather seen in the 1930s.” “The seep locations described in Mr. Sawh’s letter are exactly where I’d hope to find them,” says Warren. “It confirms there’s migration of hydrocarbon from the Canje Formation source kitchen offshore. It’s being deflected to surface by the basement highs. Our challenge now is to find hydrocarbon traps between the basement high and the coastline. Our geomicrobial survey should allow us to quickly zero in on the most prospective areas.”

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