Govt serves CGX/Frontera with 30-day notice before final eviction from Corentyne block

…Joint Venture partners signal intention to consult with lawyers

The Guyana Government has given Canadian joint venturers CGX Energy and Frontera, a 30 days’ notice before they are once and for all evicted from the Corentyne Block.

The Government of Guyana and CGX/Frontera have been in disagreement over the status of the Corentyne Block, which the company was initially undertaken to develop. While the Government have said that the partners no longer hold a licence for the block due to a lack of development, the companies assert the opposite.
In a recent statement, however, the partners revealed that they received a letter from the Government of Guyana, giving them until February 22, 2025 to state their case on the status of their licence. Further, the partners noted that they were informed that “any such licence” will be null and void on March 10, 2025.
“The Government has taken the position that the Licence, together with the Joint Venture’s Petroleum Agreement with the Government (as amended, the “Petroleum Agreement”), have terminated and that, in the opinion of the Government, there are no reasonable grounds to grant any extensions to the Joint Venture in respect of its appraisal or exploration obligations under the Licence or the Petroleum Agreement,” the partners explained.
“Furthermore, the Government says that, if it is determined that the Licence has continued, or that the Joint Venture holds any other type of licence contemplated by applicable legislation, the Letter serves as a 30-day notice of the Government’s intention to cancel such licence.”
According to the joint venture partners, they were also assured in the letter of the Government’s willingness to extend the good faith negotiations to consider any representation the two companies wanted to make.
At the same time, however, the joint venture partners noted that the letter made it clear that this offer was not an admission that the Joint Venturers still hold a licence. CGX and Frontera in their statement were adamant that they still believe they hold a licence, going on to warn that they would be consulting with their lawyers.
“Notwithstanding the foregoing, the Joint Venture is assessing all legal options available to it to assert its rights and will respond to the Government. The Joint Venture looks forward to expeditiously resolving this matter and continuing its multi-year efforts and investments to realise value for the people of Guyana and its shareholders from the Corentyne block,” the two companies said.
In 2021/2022, CGX Energy Inc, a Canadian-based oil and gas company, 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 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 fulfilled the operators’ obligation under Phase Two of the Second Renewal Period of the original 10-year licence. However, the company has since not progressed towards fully developing the potential of the block.
Back in June 2024, CGX and Frontera had announced that they had submitted a ‘Notice of Potential Commercial Interest’ for the Wei-1 discovery to the Guyana Government, which preserves their interests in the Petroleum Prospecting Licence for the Corentyne Block, offshore Guyana.
However, that move was seen by some as a last-ditch effort to avoid having to relinquish their acreage in the Block. In 2024, Vice President Bharrat Jagdeo had also pointed out that if the joint venture partners wanted to pursue a development offshore in Guyana, then they needed to detail that project and prove financing prospects.
Already, CGX has had to give up two other blocks offshore Guyana, along with parts of the Corentyne Block, after failing to develop them as per its agreement with the Guyana Government.
In December 2024, the joint venture partners in their fourth quarter update had expressed concern over comments on its Corentyne Block interest, noting that these comments “have created confusion amongst stakeholders” and even blaming the comments for hampering their efforts to develop the block.
Moreover, the companies had said that they sent the Government of Guyana a letter to activate a 60-day negotiation period to determine the way forward in the Corentyne block, something which they noted was catered for in their agreement.