The Government has granted approval for Frontera Energy Corporation and CGX Energy Inc. to move ahead with their joint venture agreement offshore Guyana. Making this announcement today was Head of the Energy Department, Dr. Mark Bynoe, who also announced that the Department is moving to recruit numerous oil experts by July month-end.
At a press conference held at the Ministry of the Presidency, Dr. Bynoe, noted that the farm-in joint venture agreement covers two shallow water offshore Petroleum Prospecting Licenses, i.e., the Corentyne and Demerara blocks. He said that CGX is planning to drill one well in 2019 using a jack-up rig.
Like CGX, Frontera is a Canadian public company but is considered to be a leading explorer and producer of crude oil and natural gas, with operations focused in Latin America.
Frontera, according to the letter agreement seen by this news agency, will finance CGX’s drilling costs related to two shallow water offshore blocks in Guyana. Those blocks are also 100% owned and operated by a subsidiary of CGX. The agreement also provides financial support as a critical step in a series of transactions that CGX is seeking to undertake in order to restructure its liabilities and provide for sufficient working capital to speed up exploration projects in Guyana.
Upon completion of the agreement and receipt of regulatory approval for the farm-in, Frontera will acquire a 33.33% working interest in the two blocks in exchange for a US$33.3 million signing bonus. Frontera has also agreed to pay one-third of the applicable costs plus an additional 8.333% of CGX’s direct drilling costs for the initial exploratory commitment wells in the two blocks. CGX would be the operator with assistance from Frontera.
CGX BLOCKS
The Corentyne block contains 1,125,000 net acres offshore Guyana in shallow water, adjacent to the ExxonMobil Stabroek block which has encountered 10 discoveries since May 2015. The Utakwaaka well is required to be drilled by November 27, 2019, with an additional exploration well to be drilled by November 27, 2022.
The Demerara block contains 750,000 net acres offshore Guyana in shallow water and is also adjacent to the ExxonMobil Stabroek block. An exploration well is required to be drilled on the block by February 12, 2021, with a further exploration well by February 12, 2023.
Meanwhile, Bynoe revealed that the Energy Department is moving to recruit numerous oil experts by July month-end with US$20M in funding provided by the World Bank.
He said it is hoped that these recruited experts will be both Guyanese and foreign oil and gas experts.
Dr. Bynoe said that the Department is aiming to fill the following posts: Petroleum Development Advisor, Crude Marketing Advisor, Natural Gas Negotiations Advisor, Oil and Gas Commercial Specialist, Petroleum Commission Needs Assessment Advisor, and Accounting Specialist.
Dr. Bynoe said that the Department is also working with the Inter-American Development Bank (IADB) to recruit some additional advisory services to ensure Production Sharing Agreement contract administration processes are created and embedded within the Department and a robust gas master plan is developed.
