CGX forks out US$320M more – in search of Corentyne ‘Black Gold’ …it’s an exciting time; the Geology makes sense – Professor Suresh Narine

RECENT news of a significant, local crude oil find by ExxonMobil, grabbed attention internationally and also resuscitated a Guyanese conversation on the country’s entry into the oil and gas sector of the global economy. There is, however, even more exciting news on the horizon; exciting enough to have convinced Government to grant CGX Energy Inc. an extension to spud another exploration well in its Corentyne concession. Co-Chairman of CGX Energy Inc. (Guyana), Professor Suresh Narine, on Friday last made the announcement during a special briefing held at the Cara Lodge international hotel in Georgetown and spoke of plans to invest at least US$320M in the near future by the oil company, in the Guyana oil basin. This is in addition to the US$350M already invested by CGX in search of the Corentyne’s “black gold.” The Canada-based CGX Energy Company, according to Dr. Narine, has no reason to believe that its exploration commitments in any of its licences will be affected in any way, since its operations are in undisputed waters, unencumbered and unaffected by Venezuela’s recent claims to sections of Guyana’s offshore territory. The company is now currently pursuing a joint venture-arrangement or alternative sources of financing to complement its drill campaign; and according to Professor Narine, the preliminary data for the area surveyed in the Corentyne Block for exploration, provides downright exciting prospects. CGX is currently exploring for oil exclusively in Guyana’s jurisdiction and with its board comprising a number of key players who have held positions throughout the global sector over the years, Professor Narine explained the optimism in prospects for the Guyana basin, the millions of US dollars spent and the several hundred millions more projected for expenditure.

OIL RESERVES He pointed to the West African coast, which has yielded some of the largest oil finds in the world, particularly around the Mauritania area, namely Senegal, Liberia and Sierra Leone. The sedimentation systems that have created those petroleum reserves along the West African coast, according to Professor Narine, are the very systems that have created the petroleum reserves along the Guianas coastline, stretching across also the Trinidad and Tobago belt along with oil giant, neighbouring Venezuela. Simply put, the tectonic plates upon which the South American and African continents sit, were several hundred million years ago – the time it takes for the earth to make oil – much closer to each other physically. This means that the raw material that went into creating the large oil reserves on the West African coast are the same that created the oil reserves along the northern coast of the South American continent, including the Corentyne Block where CGX is operating and the Stabroek Block where ExxonMobile made its discovery. “Replete with oil and gas,” was the description afforded by Professor Narine, to describe the oceanic canyon shared by the two continents, between which Guyana is positioned. Drawing the nexus, Professor Narine pointed to the “giant finds” across the South American continent and said, “When we examined the wells that we and others have drilled in this basin [Guyana], the petrochemical fingerprints are very similar.”

GEOLOGICAL SENSE According to the CGX Chairman, “it’s an exciting time because the geology makes sense.” With all the studies undertaken thus far, collated with the data from the African coast, exploring in the Guyana basin has become a lot less risky for investors, Professor Narine intimated. He said oil exploration in Guyana is no longer in a “frontier” basin, but rather the reserves are more predictable. According to Professor Narine, because of the recent developments not only by CGX but also by others in the industry, over the course of the next five years, more than three times the number of exploration wells spud over the past five years will be dug, “across the entire South American equatorial margin.” Professor Narine said too, it must be noted that the “who’s who,” of the oil and gas sector in the world, are currently exploring in the Guyana basin in addition to CGX. He pointed to ExxonMobil, Anadarko, Repsol, Chevron and RWE among others operating in the equatorial margin. Operating with the third largest acreage offshore Guyana, some 3.3 million acres, Professor Narine reported that all indications so far point to the equivalent of some three billion barrels of oil. This amount of oil, according to Professor Narine, is almost unimaginable. Should the CGX probabilities be realised, it would literally change “how futures for oil and gas are handled in the world, not just in this hemisphere,” said the world renowned professor.

TARGETS LOCKED CGX has to date already spud two wells, Eagle Shallow and Jaguar. Light oil was recovered by CGX in the Jaguar well but this had to be capped and abandoned because of the high pressures encountered. The CGX Eagle Shallow well had also yielded promising results and according to Professor Narine, with CGX having the most developed prospects in the basin, the company will be forging ahead with its well campaign. Expanding on the well campaign to be embarked on by CGX on the Corentyne Block, he confirmed that five targets have already been identified with the two major ones being the Kabukalli and Eagle Deep. He said that cumulatively the five targets identified by CGX represent “a really astounding amount of reserves.” Professor Narine surmised that industry heavyweights are poised to spud between six to eight wells in the Guyana/Suriname Basin between now and the end of next year. Apart from boasting the highest level of Guyanese employed in its operations than any of the other oil-exploration companies operating locally, Professor Narine also used the opportunity to remind his audience that of all the oil-exploration companies operating locally, CGX has invested the most. The Guyanese-born CGX Co-Chairman told stakeholders, “we have spent more money than any other oil and gas oil exploration company in the basin…We’ve spent US$350M.” To give an idea of what US$350M entails, think building the modern Skeldon Sugar Factory at a cost of US$200M and the new Cheddi Jagan International Airport (CJIA) at US$150M together, meaning CGX’s investment could have funded both these projects or think about 15 Amaila Falls access roads. According to Professor Narine, over the next three years CGX will be looking to spend another US$320M in the Guyana Basin.

By Gary Eleazar