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Jagdeo said CGX must show proof of finances or risk losing the Corentyne block
Map showing the location of the Corentyne block
Kaieteur News – CGX Energy Inc. and Frontera Energy Corporation are facing a critical juncture in their operations in the Corentyne Block offshore Guyana.
Indian Vice President Bharrat Jagdeo issued a stark warning to joint ventures at his weekly press conference on Thursday, saying “this is a critical moment.”
Professor Suresh Narine, Executive Chairman of CGX (Guyana) Energy
In his response to a last-minute Notice of Potential Commercial Interest for the Wei-1 well in the Corentyne Block on June 26, just days before the June 28 deadline for the Corentyne Block Assessment Program, Jagdeo stressed that strict conditions must be met to retain the block.
Filing this notification is critical as it secures CGX and Frontera’s interests in obtaining a manufacturing license and provides additional time for evaluation activities once government approval is obtained.
When asked about the sudden move by the Corentyne Block partners, Jagdeo revealed that the Minister of Natural Resources, Vickram Bharrat, had informed him of the submission of the proposal on Wednesday. Although he has yet to review the notification himself, Jagdeo assured that the government will thoroughly review the notification before submitting it to the Cabinet next week.
To this end, Jagdeo said: “But let me be clear, CGX will not play the role of the Guyana government. For a long time, they have been deceiving people, perhaps their investors, but we will no longer tolerate any ambiguity.”
Bharat Jagdeo Vice President (VP)
He continued: “If they declare commerciality now, they must specify how they intend to develop the project and where the funding will come from.”
The vice president admitted that he should not have been so outspoken; he said the government had legally allowed CGX and Frontera to conduct the assessment. “But now is the critical moment,” he added.
“If they are now saying they are moving to a project, they have to show us what that project is and tell us how they are going to finance that project,” Jagdeo reiterated.
If it fails to obtain government approval for further evaluation, it will be the third time CGX has abandoned an oil block in Guyana and the second time Frontera has abandoned an oil block, after it abandoned the Demerara and Berbice blocks in 2022.
In the notification, CGX and Frontera reminded that they had successfully drilled the Wei-1 well, the second well in the Corentyne block.
“The well fulfills the obligations of Phase II of the second renewal of the original 10-year license and serves as an appraisal well for the Guyana government’s Kawa-1 appraisal program,” CGX and Frontera said in a news release.
The companies also said they will continue to actively pursue strategic options to unlock the potential of the Corentyne Block, with the support of investment bank and capital markets specialist Houlihan Lokey.
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