Vice President, Dr. Bharrat Jagdeo stated today that CGX Energy Inc. has failed to answer critical questions regarding its ability to finance future operations in the Corentyne Block and whether it has a financially stable partner. During his press conference today, Jagdeo addressed questions posed by the media on the renewal status of CGX’s licence for the Corentyne Block, which the company lost last month due to failing to meet its work obligations.
Dr. Jagdeo pointed out that CGX has been unable to provide satisfactory responses to critical questions posed by the government, particularly regarding its financial capacity and the robustness of its potential partnerships. “The questions asked of CGX were—the answers given to the questions asked by CGX were not satisfactory to the cabinet and that dealt with the ability to finance any future operations and a partner that is of the standing and has the capacity both financial and otherwise, to implement a project in the future,” Jagdeo stated.
The Vice President emphasized that Cabinet’s inclination is not to extend CGX’s licence, given the unresolved doubts. “Cabinet is not inclined to grant an extension to the licence. However, they will return (to decide). They took no definitive position,” he explained.
The purported hesitance to renew the company’s licence comes after CGX and its joint venture partner, Frontera Energy Corporation, filed a notice of potential commercial interest for their Wei-1 well discovery just a day before their current extension was set to expire. CGX Energy and Frontera Energy have been operating the Corentyne Block with the expectation of making a final investment decision by 2026 and potentially starting oil production by 2030. This joint venture was poised to become the next major exploration project in Guyana, following the success of the ExxonMobil-led consortium.
However, CGX’s history with the Corentyne Block has been fraught with delays and missed deadlines. Last June, CGX received a significant extension for their Corentyne Block licence, which had expired following the filing of a notice of potential commercial interest for the Kawa-1 discovery. This extension was intended to provide CGX with additional time to explore and develop the area, which they had touted as holding significant potential. Despite these extensions, CGX has struggled to meet its work obligations, resulting in a loss of credibility with the government.
Regarding the timeline for a final decision, Jagdeo noted that the government has not set a specific deadline. “No, no, it’s—right now they don’t have a license. Right now they don’t have a license. So there is no pressure on the government to address this matter,” he said. In the meantime, the government has requested all relevant information from CGX, including seismic data and other operational details, to be deposited with the Guyana Geology and Mines Commission (GGMC).
Despite the current stance, Jagdeo acknowledged that there is a mechanism for extending the appraisal period if a favorable decision were to be made in the future. This leaves a door open for CGX, provided it can meet the government’s stringent requirements and demonstrate its capability and partnership stability convincingly.
The Corentyne Block, located offshore Guyana, is considered a high-potential area for hydrocarbon exploration holding over 514 to 600 million barrels of oil.
CGX has already lost two other oil blocks, Berbice and Demerara, due to its inability to meet work obligations. Last year, CGX also experienced a reduction in the size of their Corentyne Block due to relinquishment clauses in their contract. The original area of 6,200 square kilometers was reduced to 993.9 square kilometers.