Tuesday, 14 February 2012

CGX resumes operations at disputed Guyana well

Toronto-based explorer CGX has restarted drilling at the Eagle 1 well off Guyana, after a seven-year delay caused by border disputes between Guyana and Suriname. The resumption comes as part of increased interest in the oil and gas prospects off the northern coast of South America.

CGX, which has a 100% stake in the Corentyne licence where the Eagle well is located, restarted operations on 9 February. CEO Steve Hermeston said in a statement that the resumption “marks a significant milestone in the history of CGX”.

Drilling was suspended in June 2000, when Surinamese naval forces ordered a CGX rig to leave the area, accusing it of drilling in Surinam's waters. The area in dispute, the Guyana-Suriname basin, is believed to hold major gas and oil deposits.

The two sides contest the exact territorial line through the basin and the Corentyne river which empties into I – both parties aimed to get the largest possible share of the basin. In 2004, smarting from the suspension of the CGX contract, took the case to a tribunal operating under the auspices of the UN Convention on the Law of the Sea.

The five-member tribunal issued a ruling in September 2007 which allowed both sides to have access to the basin and the river, but gave Guyana a larger share of the basin itself: 12,800m2 compared to Suriname's 6,900m2. Despite the disparity, both sides have welcomed the result, with Suriname's president saying he was “delighted” at the ruling.

The resumption of operations by CGX is a clear vote of confidence in the new situation and a sign that exploitation of the region's resources can proceed.

Sources: Upstream, BBC

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