CGX signals move to arbitration or sole expert to resolve “d 
CGX Energy said on December 12 that it sent the Guyana government a letter activating a 60-day period to “amicably resolve all disputes via negotiation” pertaining to the Corentyne Block.
Such a period is provided for in the Corentyne Block petroleum agreement’s Article 26, concerning ‘Sole Expert Determination and Arbitration’. It says that if no agreement is reached in the period, any party shall have the right to have such ‘dispute’ determined by arbitration or a sole expert. The move comes months after statements from Guyana government officials that CGX’s license has expired and that the acreage is back with the State. CGX said that it believes its petroleum agreement is still in place. The government also did not approve an application by CGX and its joint venture partner, Frontera Energy, which would have paved the way for more time with a section of the acreage.
When CGX’s Corentyne Block license period came to a close in 2022, it claimed potential commercial interest in its Kawa-1 discovery, which allowed it to retain the discovery area for appraisal, leading to a find at the Wei-1 well in 2023. With the completion of the Kawa-1 appraisal period, CGX did not declare Kawa-1 commercial and sought instead to claim potential commercial interest in Wei-1. This is the avenue through which CGX seeks an extension, without which, its time with the block would be over.
Vice President Bharrat Jagdeo and Natural Resources Minister Vickram Bharrat, in justifying the government’s refusal to grant the extension request, noted concerns about the joint venture’s ability to find the money and a capable partner to proceed with their intended operations. They said CGX, in meetings, could not provide satisfactory answers to their questions.
“The JV recognizes that recent comments from certain Government officials have created confusion amongst stakeholders, which have materially affected the JV and caused substantial harm to the JV’s efforts to develop the Corentyne Block,” CGX said.
The statement is the joint venture’s most frontal public acknowledgment of the government’s comments yet, as CGX and Frontera had for months pushed past calls from frustrated shareholders for answers on the way forward.
CGX said, “The JV has engaged in ongoing constructive communications with the Government of Guyana regarding the Corentyne block with the latest one occurring on September 25, 2024. To date, the JV has not received any formal communications from the Government of Guyana regarding the status of the license.”
The company said it is committed to the potential of the Corentyne Block and is reviewing all alternatives to safeguard its interest therein.
CGX said in November that it is the operator of the Corentyne Block and holds a 27.48% working interest, while Frontera holds the remaining 72.52%. Frontera has, for some time, substantially footed CGX’s expenses, increasing its Corentyne Block stake from 33.33% when it farmed in, six years ago. Frontera has also bought up shares in CGX Energy Inc., becoming its majority shareholder.
CGX and Frontera also held the Berbice and Demerara Blocks, and came to agreement with the Guyana government to relinquish them in 2022, after being unable to meet obligations.