Latest update June 27th, 2024 12:59 AM
Nov 18, 2023 News
Kaieteur News – Minister of Natural Resources, Vickram Bharrat recently confirmed that Canadian exploration firms, CGX Energy and Frontera Energy Corporation have relinquished several portions of the Corentyne Block which initially measured 6200 square kilometers. Bharrat said the companies are now holding a portion of the block that measures 993.9 sq km. He said the companies had made a discovery at the Wei-1 well and according to the nation’s Petroleum Legislation, they are entitled to a two year period to appraise the discovery.
Appraisal involves assessing the size of a discovery along with other reservoir characteristics to determine commercial viability. It is a crucial step as it helps oil companies make informed decisions about drilling, investment costs, and resource estimation, reducing financial risks and maximizing the recovery of valuable hydrocarbons.
Minister Bharrat categorically stated that the area CGX and its partner have is only for appraisal. Once completing the two year timeline, CGX and Frontera will have to decide if they will move to production or return the remaining acerage to the State.
It was on November 9, 2023 that CGX and Frontera announced the discovery of a total of 114 feet (35 meters) of net pay at the Wei-1 well on the Corentyne block, approximately 200 kilometers offshore from Georgetown, Guyana. The partners believe that the rock quality discovered in the Maastrichtian horizon in the Wei-1 well is analogous to that reported in the Liza Discovery on the ExxonMobil-operated Stabroek block. Kaieteur News understands that results further demonstrate the potential for a standalone shallow oil resource development across the Corentyne block.
CGX and Frontera also told the market that the Wei-1 well, located approximately 14 kilometres northwest of the previous Kawa-1 discovery, was safely drilled by the NobleCorp Discoverer semi-submersible mobile drilling unit in water depth of approximately 1,912 feet (583 metres) to a total depth of 20,450 feet (6,233 meters).
The companies also said that Houlihan Lokey, a leading global investment bank and capital markets expert, is supporting their active pursuit of strategic options for the Corentyne block, including a potential farm down, as it seeks to develop this potentially transformational oil investment. The partners had cautioned that there can be no guarantee that the review of strategic options will result in a transaction.
As it relates to the total costs associated for the Wei-1 well, these are now estimated to be within the range of US$185-US$190 million following the successful implementation of several initiatives.
Based on results from the Wei-1 and Kawa-1 wells, the partners said they retained SIA, a Subsea 7 – Schlumberger Joint Venture, to complete a conceptual field development plan for the northern portion of the Corentyne block including subsea architecture, development well planning, production and export facilities and other considerations. As is normal course following discoveries such as those made by the joint venture at Wei-1 and Kawa-1 wells, additional appraisal activities will be required before commerciality can be determined. While such additional appraisal activities will be necessary, as a result of the third-party analysis of the Wei-1 well test results, the joint venture believes that a potential development of the Maastrichtian horizon may have lower associated development costs and be completed on a faster timeline than a broader development of both the shallow and deep zones on the entire Corentyne block.
Following an agreement reached between the two partners, it was noted that CGX will transfer up to 4.7% of its participating interest in the Corentyne block in exchange for Frontera funding CGX’s unexpected additional costs associated with the Wei-1 well, which amount to approximately US$16.5 million. If the maximum transfer occurs, CGX will retain a 27.3% participating interest, while Frontera will hold a 72.7% participating interest in the Corentyne block. CGX said it anticipates that this transaction will be completed during December 2023.
This country does not hear anything about oil from the PPP or the PNC
Jun 27, 2024
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