CGX pumped US$350M for more than 20 years before landing on Kaieteur News – CGX Energy Inc. has a well-earned reputation as Guyana’s indigenous oil and gas company. But very little is known about the extent of the investments made by this company to date and which laid the foundation for its significant Kawa-1 discovery in the Corentyne Block; a discovery that was made in collaboration with its Canadian partner, Frontera Energy Corporation (FEC).
Map showing the location of the Kawa-1 discovery on the Corentyne Block
During an interview at the recently concluded International Energy Conference and Exhibition- 2022, Executive Co-Chairman of CGX Energy Inc., Professor Suresh Narine, was open to providing Kaieteur News with a deeper understanding of what the oil industry was like back in 1998 when CGX first began operating in Guyana’s waters and what cemented its resolve to stay through the tough times.
Professor Narine said, “I was not involved with the company from the inception, having joined the Board of Directors in 2012, but one can imagine that in 1998, the founders of CGX would have faced wide skepticism, given that a discovery in the basin was not to occur until 2015! The current Board and Management of CGX are privileged to recognise the courage and vision of the founders and early management and staff of the Company.”
“Given the amount of activity in the Guyana basin today, it is difficult I am sure, for your readers to imagine what it was like for a tiny company like CGX to participate in the drilling of three offshore wells, two of which it operated directly and the operating of three onshore wells, through our 62 percent owned subsidiary, ON Energy Inc.,” he added.
Professor Narine said in those days, CGX/ON Energy was the dominant explorer in the basin, taking 100 percent of the risk on the three onshore wells (Albion, Yakusari and Hermitage), and taking 100 percent of the risk on two offshore wells – Eagle and Horseshoe – and 25 percent of the risk on Jaguar.
The Executive Co-Chairman said, “So the Company has always been a prolific explorer and the data from the wells it drilled and participated in have been pivotal to the success of the basin. CGX has never operated in any other basin – we are focused only on Guyana because that is what we were created for.
Executive Co-Chair of CGX, Professor Suresh Narine
And so together with expending a significant sum of money pre-Kawa-1 (approximately $350 million US) here in Guyana, we have over the years built deep partnerships here and have been fortunate to have always been guided by successive boards to maintain our corporate social responsibility, maintain our care and focus on the environment and maintain our groundbreaking work in the educational sector and among the Indigenous Peoples of Guyana.”
Just as an example, Professor Narine said CGX and its JV Partner, FEC, invested $5 Million Canadian in the Guyana Advanced Academic Training and Research Program in Sustainable Transformation, to support the education and initiative of Guyana’s future leaders in fields crucial for the development of the sustainable sectors of the Guyanese economy. He shared that the first five students are already studying at Trent University in Canada and additional students will be selected this year. Professor Narine said a total of 12 students are expected to be trained in advanced degrees, with all of them being required to then become lecturers and professors at the University of Guyana for a period of five years.
Even in the naming of its wells, Professor Narine said CGX is uniquely Guyanese. He was keen to note that Kawa-1 is named after a majestic mountain overlooking the village of Paramakatoi, a place he has been blessed to visit many times and meet and work with the Patamonas in the lush valleys of the Pakaraima mountains. Wei-1, the name of its next target in the Corentyne Block, is named after a tall peak in the Pakaraimas. In fact, Professor Narine shared that Wei Tepu was in fact used as a sentinel peak to guard against invading peoples.
WELLS DRILLED IN CORENTYNE BLOCK
With respect to the wells drilled in the Corentyne Block, Professor Narine said two were previously drilled: Horseshoe in 2000 and Eagle (EGT-1) in 2012. He said the combined cost of the wells exceeded US$100 Million.
The Executive Co-Chair said these wells were helpful in establishing early basin shelf modelling. He was keen to note that the Kawa-1 sits in a unique position between the shelf and deepwater and is the first well drilled in this environment. He said the location of Kawa placed its subsurface horizons between both shelf and deep-water basins, while adding that the absence of nearby offset wells made it a “rank wildcat exploration well”.
Professor Narine said, “That uncertainty on the subsurface model coupled with the anticipated high pressures and temperatures fully met the definition of a “complex well”. Our JV is very proud of our drilling and subsurface teams, operating under the leadership of Mr. Kevin Lacy, our drilling director and Jeni Budlong, our Exploration Manager, for the professional and safe operation of this complex well.”
He concluded, “We are also grateful to the Maersk Discoverer’s crew and the rig’s unique capabilities, which was key in being able to deliver on this well. We are finishing our work to decommission the well and will make a disclosure on costs at the appropriate time.”
FOCUS ON CORENTYNE
In their latest statement to the market, CGX Energy Inc. and Frontera Energy Corporation announced that, as a result of the initial positive results at the Kawa-1 exploration well, the Joint Venture will focus on the significant exploration opportunities in the Corentyne Block and will not engage in drilling activities on the Demerara Block in 2022, as noted previously.
The Joint Venture is currently engaged in discussions with the Government of Guyana regarding the Demerara Block and will provide an update on such discussions as soon as a conclusion has been reached.
Kaieteur News understands that Kawa-1 early-stage Wireline Logging results confirm the Logging While Drilling (LWD) indications previously disclosed on January 31, 2022 with a total of 200 feet of net pay encountered at multiple depths. Further analyses of logs and samples are ongoing.
Furthermore, the Joint Venture will provide an update when these activities are complete.
CGX is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin and the development of a deep-water port in Berbice, Guyana.
Frontera Energy Corporation is a Canadian public company involved in the exploration, development, production, transportation, storage and sale of oil and natural gas in South America, including related investments in both upstream and midstream facilities. The company has a diversified portfolio of assets with interests in 33 exploration and production blocks in Colombia, Ecuador and Guyana, and pipeline and port facilities in Colombia.
https://www.kaieteurnewsonline.com/2022/02/20/cgx-pumped-us350m-for-more-than-20-years-before-landing-on-kawa-1-discovery/