CGX’s delayed oil block development: It is in Guyana’s best interest to explore alternative options – GOGEC

President of GOGEC, Manniram Prashad

The Guyana Oil and Gas Energy Chamber (GOGEC) has expressed full support for Government in its stance that CGX risks losing its licence for the Corentyne block if it fails to demonstrate the financial capacity needed to advance towards production and commercial development stages.
Vice President Dr Bharrat Jagdeo recently indicated that the future of CGX Energy Inc’s operations in Guyana’s Corentyne block hangs in the balance, as the Government has taken a firm stance amidst financial uncertainties surrounding the company.
In 2021/2022, CGX Energy Inc, a Canadian-based oil and gas company, had said it had successfully drilled the Kawa-1 well in the eastern channel sand complex of the northern segment of the Corentyne block. However, the company has since not progress towards fully developing the potential of the block.
GOGEC, in a statement, has commended Government’s firm approach, and emphasised the need to safeguard national interests and ensure efficient resource utilisation. Although recognising CGX’s past investments and efforts, GOGEC has stressed the urgency of moving forward with developmental plans to avoid the risk of stranded assets.
“Notwithstanding, while GOGEC is cognizant of the investments made to reach this level by CGX, if the company cannot raise the financial resources to move forward, then it is in the country’s best interest to explore alternative options to develop and monetize the resources.
“In this regard, there is a relatively short window within which we have to develop these resources before the country ends up with stranded assets.
Therefore, a decision at the national level is imperative, in view of the foregoing”, GOGEC said in its statement.
During a press conference last month, Guyana’s Vice President had made it clear that the Government would not be ‘played’ by CGX, which has submitted a Notice of Potential Commercial Interest in the Corentyne Block even as the company lags in completing its Berbice Deep-Water Port (BDWP) project.
Last month, CGX and its majority joint venture partner, Frontera Energy Corporation, announced that it had submitted a ‘Notice of Potential Commercial Interest’ for the Wei-1 discovery to the Guyana Government, and this preserves their interests in the Petroleum Prospecting Licence for the Corentyne Block, offshore Guyana.
However, this is seen as a last-ditch move by the joint venture partners to avoid having to relinquish their acreage in the Block, and according to VP Jagdeo, Government will not tolerate this. He pointed out that if the joint venture partners want to pursue a development offshore Guyana, then they need to detail that project and prove financing prospects.
“Let me make it clear: CGX will not play the Government of Guyana. For a very long time, they’ve been jerking people’s string. Maybe they’re investors, but no longer are we going to be tolerant of any ambiguity. If they are declaring commerciality now, they have to show in specific terms how they intend to develop a project and where the finances are. I shouldn’t be so blunt, but…we’ve given them time, as per the law, to do all they had to do, but this is the crunch time now,” the Vice President had declared.
CGX Energy Inc has yet to publicly respond to the Government’s ultimatum regarding the Corentyne block.

Delayed Berbice Deep-Water Port
The Guyana Vice President’s harsh position with the Canada-based company comes on the heels of it delaying the completion of the Berbice Deep-Water Port (BDWP) project that is being built off the Berbice River in Region Six (East Berbice-Corentyne).
“They made a commitment several years ago – maybe two or three years ago – that they will complete this project. They’ve been unable to complete it as yet. So, in light of the fact that they’ve now [declared potential commercial interest in the Corentyne Block]…we have to see whether they are prepared to move to a project. If they’re moving to a project, then they would still need that [port] facility. If there is no project, we’ll have to engage them on what happens there. So, we’re going to be inviting them in for a meeting,” the Vice President has posited.
Previously, the Guyana Government had expressed concerns over the slow pace of the BWDP Project, and had made CGX relinquish the offshore Demerara and Berbice exploration blocks back to the State so that the company could focus on operations in the Corentyne Block, where it made significant oil discovery, as well as on the deep-water port facility.
Through its local subsidiary, the Grand Canal Industrial Estates (GCIE), CGX had undertaken the construction of the US$130 million deep-water port in the Berbice River, which includes a wharf facility and a trestle, as well as a cargo terminal. The port facility is being constructed to support oil and gas activities offshore Guyana.
In an update back in March, the company had said that cargo operations at the port were slated to start in the second quarter of 2024. However, in its Quarterly Highlights for the first three months of 2024, which were published on May 8, CGX reported operationalisation had been shifted to the third quarter of this year.
This is not the first time the highly-touted project has faced delays, with CGX having hoped to start operations since in 2022. Over the past year and a half, the commencement timeline has been shifted on several occasions.
Being built on about 25 acres of land adjacent to Crab Island on the eastern bank of the Berbice River, some 4.8km from the Atlantic Ocean, the BDWP facility is intended to serve as an offshore supply base for the oil and gas industry, and as a multi-purpose terminal to service agricultural import/ export, containerised and specialised cargoes, including aggregates for construction purposes.