Suriname’s intervention a blessing in disguise for CGX, says Kerry Sully

May 14, 2009 News

By Mondale Smith

An ‘interesting coincidence’ has allowed CGX to put a lot more science into its project which could now see Guyana earning as much as $200B per year once drilling commences and oil is brought to the surface offshore of Guyana and Suriname.

President and Chief Executive Officer of CGX, Kerry Sully yesterday during his press conference.

President and Chief Executive Officer of CGX, Kerry Sully, told this publication yesterday that Suriname’s removal of CGX’s oilrig in 2000 during a Guyana/Suriname Border dispute “might have been a blessing in disguise.”

He said that if Suriname did not halt the oil exploration in 2000 it was quite likely that his company would have missed the new target at the new depth.

“It’s quite likely that we would have missed the target as we would have been focussed on the tertiary 1300 foot level.”

Many of the company’s backers were significantly disappointed when Suriname removed the rig but the company, years later still has about 75 per cent of the investors aboard as well as the entire management team which he dubs “a very loyal group.”

He said his company is in it for the long hall and notes that that to date CGX has invested US$52M and has helped in the funding of the legal aspect of Guyana’s challenge which lead to a resolution of the Suriname/Guyana Maritime border dispute.

The Canada-based company CEO said during the intervening period his company did a very technical and detailed analysis of a 3D survey took them beyond the original target to a new priority target of 15,000 to 20,000 feet.

Because of the time factor that elapsed during the stopping of the project by Suriname, Sully said his company’s interpretation of the lower layer has changed through the yet to be thoroughly analysed 3D imaging. Sully reiterating his prediction that Guyana’s earnings could be as much as $200B per year once drilling commences and oil brought to the surface said that “at this point it’s not worse but it’s different.”

Natural gas deposits possibilities

Should gas deposits be found in the Guyana/Suriname Basin he said that his company would have been wrong in its analysis.

He says as long as the government support continues as it is allowing the project to move forward quickly, oil can be seen coming out of Guyana in five to six years.

Speaking of financing Sully said that a high degree of interest in CGX followed the Maritime dispute between Guyana and Suriname and the company managed to raise US$35m for the Treaty exploration phase.

As of end of last year, C’dn$22m was in hand after the company paid for the 3D services acquisition and for 2009 the Capital budget is US$5M with a probable operating budget of US$2M and by year end about US$15m will remain in hand.

Speaking on the impact of the current economical crisis regarding the future of CGX Sully said it has not had much impact on his company

During a press conference two days ago Sully said that by the end of July the processing and interpreting of data complied will conclude.

It was established in Guyana’s negotiated agreement with the company that 53 percent of the proceeds would go to the state and the remainder to CGX.

Following the arbitration ruling on the issue there has not been a resumption of operations immediately in the best interest of all parties to enhance their studies through use of technology.

Sully’s prediction puts company’s future operations as very successful and he guarantees that once oil is discovered job creation and education upgrade of the locals are guaranteed.

Guyana’s oil reservation, Sully said, amounts to about 0.2 percent of the worlds while the probability for oil being discovered in Guyana is a one in five which is a great probably than in the oil world.

CGX hopes to team up with other companies exploring in the area to lower costs. In Guyana, the company also holds a stake in the Georgetown offshore license.