CANADIAN-based CGX Energy Inc. is looking to begin drilling next year for oil offshore the Guyana-Suriname basin regarded as a major new frontier in the industry.
Mr. Kerry Sully, CGX CEO and President, at a media presentation at the Pegasus Hotel in Georgetown yesterday, said the company is confident it will make a drilling commitment to the Guyana Government and expects to see wells in the offshore basin next year.
At the presentation yesterday, Canadian High Commissioner Charles Court and CGX CEO Kerry Sully, fourth and third from right, with Sir Shridath Ramphal, at right, and other officials.
We are well-financed and well-prepared to move forward, he announced, adding that CGX has retained some of the leading consultants on oil well design.
CGX's total investment so far is US$52M and the firm is purely focused on exploration in Guyana, Sully said.
Guyana has the second most under-explored basin in the world according to the United States Geological Survey (USGS) and Sully said it is well-located in what the industry calls the Golden Triangle;.
He noted that there has been very little offshore exploration here in the past 50 years and the challenge is to move from resource to reserves, estimated to be about 15.2 billion barrels of oil and 42 trillion cubic feet of natural gas.
Offshore Guyana is in a proven hydro carbon system and there is current incredible activity in the area, he said.
Big oil companies in the area include Shell, Exxon and Spanish-based Repsol.
Sully said interpretation of most of the 3D seismic data collected since last year should be completed by July and the Eagle Deep concession is the most exciting prospect.
If there is a major discovery, the Guyana Government will get 53 per cent of the cash flow, he reported.
“Guyana is a very good place to do business, he said.
CGX’s working capital at the end of last year was US$22M and the capital programme this year is billed at US$5M, he said.
Drilling a deep well up to 19,500 feet is estimated to cost about US$85M and leading-edge technologies are being used in the search, Sully said.
His presentation was themed `Guyana – on the brink of exploration success and among invitees were Sir Shridath Ramphal, former Commonwealth Secretary General and Guyana Foreign Minister.
Ramphal led the Guyana legal team that in 2007 successfully argued this country's case in the United Nations against a border claim off the Corentyne by Suriname.
Exxon Mobil, one of the largest oil companies in the world, in late September last year began oil exploration in deep water off Guyana in a sign of the growing foreign interest in the country after the U.N. boundary ruling.
This followed CGX Energy's earlier announcement that it will begin offshore exploration, a resumption of its frozen activity after the U.N. ruled in favour of Guyana in the sea border dispute with Suriname.
Guyana hailed the ruling, hoping it would draw back oil companies to tap reserves offshore and boost an economy that depends on the agriculture and mining industries.
The U.N. decision set a frontier between Guyana and Suriname in the Atlantic Ocean.
In June 2000, CGX was forced to halt a drilling programme it had started off the Corentyne coast after gunboats from the Suriname navy ordered the crew and hired rig out of the zone.
CGX in October announced that in association with Spanish-based giant RepsolYPF, it had begun the high-tech 3D (three-dimensional) seismic programme previously announced on June 5 and in September.
"We are pleased that the programme has now commenced after a delay in the vessel arriving in Guyana due to weather in the Caribbean. During the current global credit crisis, we are fortunate to be fully funded for this programme that we estimate to be approximately US$16 million", Sully said then.
CGX said it was undertaking the 3D programme on its Corentyne concession and was participating with YPF Guyana Ltd., a subsidiary of Repsol YPF, in a 1,650 square kilometre 3D programme on the adjoining Georgetown bloc, in which CGX holds a 25 percent interest.