Old promises Asked about Pacific Rubiales’ stake in CGX, Narine said that as of yesterday it was about 48 percent. “But it depends on how you do the math. You must be able to apply the mathematics within the context,” he said.
“I am not going to skirt around what you all know…CGX upon drilling of the last dry well experienced a plummet of its stock. It experienced a significant deterioration of its prospects and we set about quite deliberately to rebuild the promise of those prospects. Now today I am happy to announce that CGX has announced over the past weeks and months the renewal of three of its most important licences: its Corentyne, Demerara and Berbice licence.
“CGX proposed a work plan which spans between an estimated US$600 million to US$1 billion in expenditure over the next five years. We set out to secure a partner who could be there with us for the distance of that. I am pleased to announce today that after an exhaustive look at our options, we decided to invite Pacific Rubiales, which already owned 30 percent of CGX, to join us,” he said.
He said that Pacific Rubiales has been able to deliver the most results by a single company in this basin.
Narine said that CGX has spent more than US$290 million since it commenced operations in Guyana during the 1990s. He said too that the company has about 85 employees when it is not drilling and when it is drilling that increases significantly to more than 300 persons.
“We don’t believe that those numbers are enough. We believe that we need to engage in additional training and this is why we need to engage in partnership. We as a company are committed to see local [employment]. Long before we pump a single drop of oil there is a tremendous opportunity in this sector for Guyanese companies and Guyanese people but we have got to partner with Government and more importantly with the private sector because risk is an important part of being able to access [petroleum resources]. So over the next months or years will see us partnering with the Ministry of Labour and Ministry of Natural Resources and Environment in articulating what we believe are the opportunities for Guyanese out there so that the private sector could position itself to partner with us,” he said.
Asked about the capacity of the company to manage and contain a mishap offshore, he said that CGX has a 100 percent safety record in its drilling of six wells in 15 years. “One must not pander to the ability to attract headlines,” he said, in clear displeasure at the question posed. “What I want to assure your readers is that this will continue. I am in charge of the committee that oversees health, safety and the environment and this is paramount,” he said.
He said that when the issue of a potential problem with the Jaguar 1 well came up, CGX was the first party in that consortium to register a vote to say that safety for the environment must be paramount.
Narine said that CGX’s collaboration with partner entities to look at spill cleanup and management was not because of the company’s inability to handle the matter on its own but rather because it is a shared responsibility. On the new well, Narine said that the company is bound by certain rules of disclosure and because of this he could not reveal the location of the well.
On the conclusion of the private placement, CGX’s board will be reconstituted as follows to ensure that a majority of the directors are nominees of Pacific Rubiales: