CGX has undertaken preparations for developing the necessary onshore staging and storage facilities in support of the drilling programme that is expected to begin in the second half of next year.
The oil company has also discussed its projections with the head of state for exploration activities in its license concessions in Guyana beyond the Corentyne area.
Addressing a gathering at the Guyana Manufacturing and Services Association’s annual presentation awards dinner ceremony Thursday night, President and Chief Executive Officer of CGX, Kerry Sully, said there is a 50 per cent chance of discovering oil within the next twelve months.
Such a discovery is set to benefit Guyana tremendously while there will also be worldwide benefit.
The CGX president revealed that the oil basin in the vicinity of Guyana is the second largest underexplored basin in the world. Geologists have identified 15 targets off the coast of Guyana and a number off the coast of Suriname and French Guiana.
“This is getting really exciting. We went fifty years with only 22 wells drilled and now in the next 12 months there are going to be six wells drilled in the off shore and a major well drilled on shore in the Takutu Basin,” Sully said.
He said as of November 8, Murphy started drilling off shore Suriname using a rig called the Atwood beacon, which is drilling a target that is an aged rock that will be similar to the one that “we will be drilling on our (Guyana) off shore. Jaguar test offshore Guyana would be finished closed to Christmas time, the rig will move to another Murphy location to a shallow target.”
Sully explained that different Geologist and Geophysicist disclosed that the chances of success for each of the targets range from one in five, however the chances of one of the targets being successful is “50 per cent, and those are very good odds for international exploration target; we are looking at very large basins certainly by world standard and over the last three years there is only six reservoirs per year found 300-million barrels, and two of them are here in off shore Guyana and there are three to be drilled off shore Suriname that is also bigger than 300 million barrels and if the discovery starts, its going to be very large.”
At the exploration stage, offshore seismic surveys help the industry locate geological areas with potential reservoirs of oil or gas. The next step is to drill wells to confirm the presence of hydrocarbons and evaluate whether production will be economically attractive.
CGX president said that Guyana has a very good chance of success on its first three wells and from the experience it will determine the next three locations.
In addition, Sully said that the current oil demand forecast show that the world is currently producing and consuming 88 million barrels of oil per day, which means every twelve days the world is burning one billion barrels.
He further disclosed that one of the places that the United States Geologic survey has identified in the year 2000 was the Guyana/Suriname basin, it was identified as a new frontier, and viewed its potential at 15 billion barrels; which was deemed the second most attractive underexplored basin, the most attractive being offshore Greenland.
Sully said that growth would come from unconventional oil, which will be a deep oil drill of the shores of Brazil, Canadian and Venezuelan oil sands, which Guyana will also be making a significant contribution.
The CGX president is assuming that production over a ten-year period should result in 140,000 barrels of oil being produced per day, while the oil profits will be divided 50/50 between the government and the contractor.
“Guyana is well positioned to attract companies to explore…. which will have a significant impact on GDP and employment.”
Sully said that if there is oil discovery next year, production could begin within four years. CGX had attempted to drill at the Eagle location in 2000 but was forced off by Surinamese gunboats. The United Nations has since resolved the maritime border between the two countries, largely in Guyana’s favour.
The oil explorer recently disclosed that the Jaguar well in which CGX has a 25 per cent interest, is scheduled for the second quarter of 2011 on the Georgetown block. The Eagle well, in which CGX has a 100 per cent interest, will probably be drilled in the third quarter “depending on who we bring in as a joint venture partner.”
CGX recently invested US$20 million and has US$27 million working capital for its project in Guyana.
In 1996, the founders of CGX began negotiations with the Government of Guyana to acquire an offshore concession to explore for oil.
CGX Energy Inc. is a Canadian-based oil and gas company focused on exploring for oil in the Guyana-Suriname basin. Its licences in Guyana cover 9.5 million gross acres, 7.2 million net.