“We’re under no pressure to make decision now” – VP Jagdeo on CGX

Vice President Dr. Bharrat Jagdeo has declared that the Guyana Government is under no pressure to decide on the future of Canadian-based, CGX Energy Inc., about the Corentyne Block offshore Guyana.
CGX and its majority joint venture partner, Frontera Energy Guyana Corp., are at risk of losing the Corentyne block after they failed to demonstrate the financial capacity needed to advance towards production and commercial development stages – a crucial requirement for the renewal of their exploration licence. As a result, the Petroleum Prospecting Licence for the Corentyne Block has expired.
During a press conference earlier this week, VP Jagdeo was asked whether the government had decided on CGX. However, he pointed out that there was no rush to do this.

“We’re under no pressure… It’s not like a renewal of licence is dependent on a decision [by Government] – they do not have a license at this stage… And so, we’re under no pressure to make a decision now,” Jagdeo contended.
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. However, the company has since not progressed towards fully developing the potential of the block.
Back in June, CGX and Frontera 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 as a last-ditch effort by the joint venture partners to avoid having to relinquish their acreage in the Block.
Meanwhile, it had been reported that CGX and Frontera have approached US-based investment bank, Houlihan Lokey, as they explore strategic options to develop the Corentyne Block.
In an August 7 press release on its Financial Statements for the second quarter of 2024, CGX said the JV partners have been working with the Guyana Government on moving forward.
“[We] have engaged in regular, constructive and collaborative conversations [with the Guyana Government] throughout the Joint Venture’s tenure on the Corentyne block, including discussions regarding conditions and timing under which further activities could be performed by the Joint Venture in the Corentyne block. The Joint Venture, with support from investment bank and capital markets experts Houlihan Lokey, continues to actively pursue strategic options to unlock the potential of the Corentyne block,” CGX stated.
According to Jagdeo at Wednesday’s press conference, the matter is before Cabinet and the Government will disclose when it decides on CGX’s future.
Only a few months ago, the Vice President 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.
“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 their 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,” he asserted at a June 28 press conference.
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.
Based on reports, if the Notice of Potential Commercial Interest is approved by the Government, it would allow the joint venture partners to have an appraisal period to conduct an assessment of the commercial viability of the discovery. If it is determined that there is commercial viability, this would be declared to the Government and pave the way for the operators to apply for a production licence before the appraisal period ends.
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.
The Vice President’s harsh position with the Canada-based company comes on the heels of the company delaying completion of the Berbice Deep-Water Port (BDWP) Project that is being built off the Berbice River in Region Six (East Berbice-Corentyne).
Previously, the government had expressed concerns over the slow pace of the BWDP Project and had made CGX relinquish the Demerara and Berbice exploration blocks offshore back to the State so that the company could focus on operations in the Corentyne Block, where it has 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 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 was published on May 8, CGX reported that operationalisation has been shifted to the third quarter of this year.
This is not the first time this highly-touted project has faced delays, with CGX hoping to start operations 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, and some 4.8 km 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.
GCIE had also previously reported that there were some minor setbacks with the project, due to revisions that were needed to the design of its wharf and trestle in the Berbice River. (G-8)