12 years after Suriname ejection…CGX starts drilling for oil in Corentyne concession

Feb 14, 2012 News

Almost 12 years since being ejected by neighbouring Suriname from the Corentyne area,

The Ocean Saratoga rig, hired by CGX Energy, has started to drill at the Corentyne concession.

CGX Energy Inc. has announced that it has commenced drilling for oil at the Eagle-1 well.
The news came days after Government announced that a group comprising Repsol Exploracion S.A (15 per cent), YPF Guyana Limited (30 per cent) and Tullow Oil plc (30 per cent) and CGX, has started drilling at a location 107 miles offshore Georgetown. That well is known as the Jaguar-1 well.
It was widely expected that drilling in the Corentyne concession, which is 100 per cent owned by CGX will take about two months.
According to CGX in a statement yesterday, the Eagle-1 well will be drilled to a depth of 4,250 metres to test the Eocene and Maastrichtian geologic zones.
“The well is being drilled by the Ocean Saratoga semi-submersible drilling rig owned by a subsidiary of Diamond Offshore Drilling, Inc., a leading drilling contractor with over 40 years of global drilling experience.”
According to Steve Hermeston, President and CEO, yesterday would mark a significant milestone in the history of CGX. “We are returning to drill the Eagle prospect that was halted in June 2000 due to overlapping maritime border claims between Guyana and Suriname.”
During that time, renewed exploration followed seven years of dedication and co-operation between the Government of Guyana and CGX in resolving the Maritime Boundary between Guyana and Suriname peacefully and finally through the International Tribunal of the Law of the Sea (ITLOS) process.
Following the resolution of the maritime border, CGX had shot two-3D seismic surveys, creating a portfolio of prospects on the Corentyne PPL, Eagle-1 being the first well to be drilled to test the original Eocene prospect, plus a deeper Maastrichtian prospect, both of which are stratigraphic tests.
“The current location will significantly benefit from the 3D acquired in conjunction with advances in better understanding the optimal position to test reservoirs deposited in deep water environments.”
With oil prices rising, Guyana is pinning its hopes that oil is found in commercial quantities in the two wells being drilled. A significant amount of the revenues spent on oil purchases from mainly Venezuela.
On Thursday, the consortium announced that it started last Tuesday to drill for oil at the Jaguar-1 well offshore Georgetown. The Atwood Beacon, a jack-up rig, is in place and drilling is fully underway, officials said.
Unlike the Corentyne well, Guyana will have to wait another six months or so to know whether oil in commercial quantities has been found in the Jaguar-1 which is located in a concession over 3,700 square kilometers.
The Jaguar-1 well is about an hour’s flight or 12 hours by boat from Georgetown while the Eagle-1 is further east, nearer to Suriname.
Already, for the Jaguar-1 well, Repsol and its partners have spent around US$52M, to rent the Atwood Beacon rig, among other things.
The group expects to spend up to US$180M to drill in the Georgetown concessions.
CGX officials have indicated that the operation may cost them around US$55M to drill in the Corentyne area.
But renting the rigs is not cheap. CGX is spending around US$500,000 daily to have Ocean Saratoga anchored in the Corentyne concession.
The Atwood Beacon rig is even more expensive, racking up around $650,000 in costs, daily.
The US and the Commonwealth are working with Guyana to prepare the country deal with the likely possibility that oil is found.