Frontera-CGX Energy JV’s prospecting licence expires: Govt, CGX remain on good terms – Natural Resources Minister

Minister of National Resources Vickram Bharrat says that Frontera-CGX Energy JV’s prospecting licence has not been cancelled but rather expired.
Addressing the issue with this publication on Wednesday the National Resources Minister pointed out that the laws in Guyana allow the Government to issue 10-year exploration contracts, and if in the event there is a discovery and the company indicates to the Government that there is a discovery of commercial interests, then the Government is obligated in a way, to extend the time for additional appraisal work, to determine or to quantify the amount of hydrocarbon that is there, and to determine whether it can actually lead to production.

“So, what has happened to the CGX contract is that they would have exhausted their ten years of exploration; they were given additional time because they made a discovery for appraisal… it is clearly that, after this [time] expired, you must indicate to the Government whether you are in a position to move towards production, otherwise the block is returned to the state; and that is exactly what happened,” Bharrat explained.
He said CGX was given a licence for ten years, as well as the additional time given for further appraisal work to determine whether they could produce oil in that block at that point in time.
“So that was the situation with CGX. We however, in Government, we want to thank the company for the interest in Guyana, because CGX has been a company that has been with Guyana for a while. They have invested a lot in Guyana, which we have recognised through our numerous engagements with them, through our numerous efforts to help them with their work programme, and assisted them in areas that they were failing, and guided them through the process; so we have been there as a partner to CGX during that,” he noted.
The Minister also noted that the Government has conveyed to CGX that they will always have a partner with the Government of Guyana.
“I don’t want to say that there is any bad blood or there is any level of animosity from the Government of Guyana’s perspective with CGX or any other oil company,” the Minister declared.
Asked about the next step forward, Minister Bharrat said that now the exploration block is back with the state, there are two ways forward in which a new oil block can be awarded under the new Petroleum Act.
“One is through an open new bid round, like we had two years with 14 blocks available for bidding, or the second way is by direct negotiation between Government and Government or Government and company,” he stated.
However, Minister Bharrat pointed out that on both methods, the Government has a production sharing agreement (PSA).
“We had made a promise when we campaigned, that we are going to ensure that any new PSA signed in the future will have better fiscal benefits for Guyanese, and any new arrangement that you make now whether by bid round or whether by direct negotiations, the companies will have to accept the terms and agreements,” he affirmed.
He added that as it stands, no formal decision has been taken by the Government as to what method would be used for future exploration of the Corentyne Block.
CGX Energy Inc, a Canadian-based oil and gas company, in 2021/2022 said it had successfully drilled the Kawa-1 well in the eastern channel sand complex of the northern segment of the Corentyne block.
In 2023, the joint venture partners had successfully drilled the Wei-1 well, the second well in the Corentyne Block, as part of their appraisal programme for the Kawa-1 discovery, which ended on June 28, 2024. That drilling exercise had fulfilled the operators’ obligation under Phase Two of the Second Renewal Period of the original 10-year licence. However, the company had since not progressed towards fully developing the potential of the block.