Latest update December 13th, 2024 1:00 AM
CGX protests Govt. repossession of Corentyne Block
…Jagdeo says nothing to discuss, licence expired
Kaieteur News- While CGX and Frontera are fighting to hold on to Guyana’s Corentyne Block, Vice President Bharrat Jagdeo has reiterated the Government of Guyana’s position is that the licence has expired and that the block has been repossessed by the State.
On Thursday, at his press conference, Jagdeo was asked about the letter that was sent to government by the joint-venture activating a 60-day period for the parties to the Corentyne Block Petroleum Agreement to make all reasonable efforts to amicably resolve all disputes via negotiation, as provided for in the Corentyne Block Petroleum Agreement.
In 2023, CGX discovered oil at its Wei-1 well, located 14 kilometres west of the Kawa-1 discovery within the block. Although oil was found at Kawa-1 in January 2022, CGX and Frontera chose to focus on the Wei-1 well. Further drilling in the Corentyne Block was said to depend on positive results at Wei-1, with the joint venture reportedly having no further obligations beyond this well. However, before the licence expired earlier this year, CGX submitted a notice of potential commercial interest to the GoG, hoping for additional time to appraise the Wei-1 discovery and evaluate its viability.
Guyana’s Vice President (VP) Dr Bharrat Jagdeo
However, despite the company’s hopes for additional time to assess oil prospects, the government remained cautious and repossessed the block.
“If the term of the licence and when they’re required to do some – or to take some actions under the licence that they failed to comply with, then there is no issue to discuss. If they have a different interpretation, then we can go through the legal process. As far as we are concerned, the legal advice is that the licence lapsed because of the conditions under the licence and the timeline for the licence itself. That’s our position,” Jagdeo said yesterday.
The Vice President further noted that while he has not seen the letter, the State’s lawyer will look into the situation.
Notably, while he refrained from saying much on the JV move, Jagdeo noted, “When your licence expires, do you have to get a formal communication from the government? If it says two years your licence is approved for, if you don’t get an approval for, if you don’t get an approval for extension, that means, consistent with the law of the country, it’s done.”
Last month, BNamericas reported that the Chief Executive Officer (CEO) of Canadian oil explorer, Frontera Energy Corporation, Orlando Cabrales is insisting that the company and its partner CGX Inc. has met the legal requirements to continue exploring the Corentyne Block.
Cabrales insisted that the companies met all legal requirements to maintain the Corentyne Block. “We remain committed to the potential development of the block,” Cabrales told investors in a quarterly results conference call. “That conviction is supported by the discoveries. We have complied with the conditions of the exploration licence and are considering different alternatives to protect our interests in the licence…I have nothing more to say at this time,” Cabrales said.
Similarly, in a statement published by CGX. on Thursday. it was noted that the JV remains committed to the potential development of the Corentyne Block as supported by the JV’s recent discoveries at Kawa-1 and Wei-1.
It was stated that the last communication the JV had with the government was on September 25, 2024. However, to date, the companies said they have not received any formal communications from the Government of Guyana regarding the status of the licence.
“The JV is firmly of the view that the Corentyne block Petroleum Agreement remains in place,” CGX and Frontera said.
It was further stated, “The JV recognizes that recent comments from certain Government officials have created confusion amongst stakeholders, which have materially affected the JV and caused substantial harm to the JV’s efforts to develop the Corentyne Block.”
As such, the companies sent the letter to government activating the 60-day period a negotiation with the hopes of an amiable solution.
(CGX protests Govt. repossession of Corentyne Block)
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