Latest update February 6th, 2025 7:27 AM
CGX racks up US$155M in expenses to recover from any oil projects in the Corentyne Block
Kaieteur News – Canadian oil explorer, CGX Energy Inc. has made it clear that it intends to recover US$155M in costs brought forward from its original Corentyne Block license, if it develops the resources found there. This would make the second time a company moves to recover ‘pre-contract costs’, after ExxonMobil and the Stabroek Block.
CGX has not decided yet whether the resources it discovered at the Wei-1 and Kawa-1 wells are commercial. Once potential commercial production commences, CGX is permitted to recover its costs.
Should CGX decide to develop the resources, they will also attempt to recoup the current contract costs connected with the drilling of the Kawa-1 and Wei-1 wells. Moreover, there’s potential for more wells to be drilled by June 2024, which will add further to the costs to be recovered. CGX is also racking up expenses with the construction of a deepwater port at Berbice. The port, aiming to serve the oil and gas industry and provide a multipurpose terminal, is expected to be operational mid 2024. Together, CGX’s pre-contract costs, the costs associated with its wells, and the cost of the deepwater port, will add up to hundreds of millions of US dollars.
ExxonMobil had racked up US$460 million in pre-contract costs for the Stabroek Block, and is now adding tens of billions more with wells and projects. If CGX goes forward with their Corentyne Block development, it would mark the second time a company is inserting pre-contract costs into the cost bank. The government has been handling the audit of Exxon’s pre-contract and current contract costs with a worrying lack of transparency. It would be more worrying for another block to move to development, with the government continuing to treat the transparency of audits in this way.
CGX’s projects
The Wei-1 well, as of June 11, 2023, reached a depth of 20,450 feet. By July 5, the operations were completed. The Wei-1 well encountered 210 feet of hydrocarbon bearing sands in the Santonian horizon. The Joint Venture acquired wireline logs and extensive core samples from the Santonian, however, due to a tool failure downhole and a back-up tool not being available, oil samples were not obtained. The rock and fluid properties of the Santonian are being analyzed ed by an independent third-party laboratory over the next two months to define net pay and a basis for the evaluation of this interval. The Joint Venture updated its previously announced discovery in the Maastrichtian and the Campanian intervals to 77 feet of net pay.
A map showing the location of the Corentyne Block
Last year, CGX announced the discovery of 228 feet of net pay across the Maastrichtian, Campanian, Santonian and Coniacian horizons at the Kawa-1 exploration well. Third-party analyses indicated the presence of light oil in the Santonian and Coniacian, and gas condensate in the Maastrichtian and Campanian.
CGX is also building a Berbice Deepwater Port facility to serve as an offshore supply base for the oil and gas industry and as a multipurpose terminal to service agricultural import and export, containerized and specialized cargo including aggregates for construction purposes. The port aims to enable provisioning of operators and vendors in territorial waters of both Guyana and Suriname.
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
Land, taxes and penalties
Peeping Tom… Kaieteur News-The American humorist Will Rogers once remarked that the best investment on earth is earth... more
OAS Secretary General Election and renewed OAS Consensus
Antiguan Barbudan Ambassador to the United States, Sir Ronald Sanders By Sir Ronald Sanders Kaieteur News- The upcoming election... more
Weekend Cartoon
