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CGX losses on Corentyne Block pegged at US$56.4M
…says Govt. position that JV licence expired has caused uncertainty
Resigned from CGX, Dr. Suresh Narine
Kaieteur News – CGX Energy has disclosed that it has recognised the loss US$56.4 million on its exploration and evaluation related to the Corentyne block asset, located offshore Guyana.
CGX is part of a joint venture (JV) partnership with Frontera Energy that was booted from the block by the Government of Guyana after failing to meet obligations. Earlier this year, the JV received a formal communication from the government stating that the Petroleum Prospecting Licence (PPL) and Petroleum Agreement had ended–a position the JV has repeatedly rejected.
On Wednesday in a statement, CGX announced the recognition of an impairment loss of US$56.4 million related to the Corentyne Block. The company said it evaluated the Corentyne exploration and evaluation asset’s recoverability as a result of the government’s conduct, communications, and “unwillingness” to recognise the JV rights during the consultation periods, which have since expired.
“Although all contractual requirements of the Company have been met and an external legal assessment determined that the Company’s interests in the licenses and agreements for the Corentyne Block remain valid, the GoG’s positions mentioned above have restricted the Company’s ability to develop activities under those licenses and agreements,” the company said.
To this end, it was explained that the situation has led to uncertainty regarding the asset’s future development and constituted an impairment indicator. Consequently, CGX said it recognised an impairment of US$56.4 million on the Corentyne Block asset.
Notably, after more than two decades of exploration, the JV finally struck oil at the Kawa-1 well in January 2022. Just ahead of the June 28, 2024 deadline for the block’s appraisal programme, the JV submitted a Notice of Potential Commercial Interest to government for the Wei-1 well, on June 26. The government later said stringent conditions would need to be met to retain the block. In March 2025, the government issued a 30-day notice and gave the oil companies a chance to make representations. Government was open to good-faith negotiations within the specified timeframe.
However, government eventually cut ties with the JV in relation to the Corentyne Block and said that it is of the view that there are no reasonable grounds to grant an extension to CGX and Frontera for their exploration and appraisal obligations.
Despite the government’s formal communication to the JV, they remain of the view that its interests in, and the licence for, the Corentyne Block remain in place and in good standing and that the Petroleum Agreement has not been terminated.
Frontera and CGX recently disclosed that the government, through its legal counsel, responded on July 23. In that communication, the government rejected the oil companies’ claims regarding the Corentyne Block and reaffirmed its position that the JV’s interest had expired on June 28, 2024. However, the JV said the government also stated that it “may consider a final meeting with the Investors, on a without prejudice basis, in October 2025, and the Joint Venture would be informed as to whether such a meeting will occur in September 2025.”
Moreover, CGX also announced on Wednesday that Dr. Suresh Narine has resigned from his positions as Executive Director, Guyana and Executive Co-Chairman of the Board of Directors of CGX and from his positions with the Company’s subsidiaries to pursue academic endeavours. The Company has initiated a search for a permanent Chief Executive Officer and will provide a further update when available.
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