Canje block awarded 2 months before Exxon strike – principals

SARA oil blocks probe

…financial, experience bona fides satisfied

With reports of the State Assets Recovery Agency (SARA) investigating the award of oil blocks including the Canje Block, companies exploring those blocks are insisting that contrary to reports, they were awarded the blocks before the area was derisked.
This is according to JHI Associates Inc (JHI) and Mid-Atlantic Oil and Gas Inc (MOGI), which in a statement on Saturday clarified that when they acquired the Canje Block it was very much a high-risk investment on their part.
According to the companies, negotiations for the Canje Block began in March 2013, with the Canje Block licence itself being awarded on March 4, 2015. The companies noted that the Liza-1 well began drilling on March 5, 2015.
“On May 20, 2015, the Liza-1 well was announced as a ‘significant discovery’. Over 40 wells had been drilled offshore in the Guyana-Suriname Basin prior to Liza-1, and none encountered commercial quantities of oil or gas,” the joint statement said.
The companies noted that the Liza-1 well on the adjacent Stabroek Block was very high-risk and did not begin drilling until after the Canje Block licence was signed. The statement added that prior to this, there were no discoveries anywhere offshore Guyana.
Additionally, the companies noted that they followed all applicable laws and regulations when they applied for and received the license for the Canje Block. They pointed out that their qualifications met the Guyana Government’s requirement that licence applicants had to demonstrate technical expertise and financial capabilities.
“For the Canje Block licence application, Cullen and Dookie brought a technical team with over 130 years of offshore petroleum exploration experience, and significant financial capabilities based on prior successes in raising US$100s of millions of dollars for oil and gas exploration projects in Guyana and elsewhere,” they said.
“The founders of JHI, Mr John Cullen, and MOGI, Dr Edris K Dookie, each have over 20 years’ experience exploring for oil offshore Guyana as the original co-founders of CGX Energy. Through CGX, they both served Guyana exceptionally, through the drilling of several offshore wells, and especially in relation to the pivotal role they played in the successful resolution of the maritime boundary dispute with Suriname.”
No contact
The companies also confirmed that despite the fact that they are in the centre of SARA’s investigation, they have not been contacted by the agency. In addition, SARA has not contacted them to request any information.
“Neither company has been notified of any pending investigations into the award of the licence for the Canje Block. Both companies welcome the opportunity to discuss this matter with duly authorised agencies of the Government of Guyana at any time,” the joint statement added.
“JHI and MOGI value our reputations as good corporate citizens and are committed to operating all aspects of our businesses in an open, cooperative and transparent manner. We recognise the importance of this resource to the people of Guyana and take our responsibility to explore for oil and gas offshore Guyana very seriously.”
On May 22, an article appeared in the New York-based Bloomberg website, in which SARA Director Dr Clive Thomas was quoted confirming that there was a probe. According to Thomas, the probe was in its early stages and would be centred on the award of blocks and licenses to ExxonMobil and Tullow.
Thomas was quoted by Bloomberg as saying “we’re investigating the issuance of the licenses, for example, and the various blocks. We’re building up a case. This is an area of investigation into how the blocks were allocated and the decisions that were made”.
“We’re at an investigatory stage so we can’t libel persons by saying that we found proof of anything. There’s enough evidence for us to want to continue the investigation,” the article also quoted him saying.
The Georgetown Chamber of Commerce and Industries (GCCI) has contended that reports of an investigation into the award of oil blocks being done by the State Assets Recovery Agency can harm Guyana by discouraging investors from vying for future oil blocks.
At a press conference on Tuesday last, Head of the GCCI’s Petroleum arm, Charles Ramson expressed worry over the impact these revelations have on Guyana’s image. He noted that the fact that the revelations initially appeared in Bloomberg means thousands in the global business community would have read this unsavoury news.