CGX yesterday announced that it has begun drilling for oil in the Eagle-1 Well in its 100% owned and operated Corentyne Petroleum Prospecting Licence – the same spot it was evicted from by Surinamese gunboats 12 years ago.
CGX’s rig is the second to be drilling for oil simultaneously offshore Guyana, a first for this country. CGX also has a 25% interest in the other licence which also includes Repsol and Tullow.
The statement from CGX yesterday said the Eagle-1 well will be drilled to a depth of 4,250 metres to test the Eocene and Maastrichtian geologic zones. The well is being drilled by the Ocean Saratoga semi-submersible drilling rig owned by a subsidiary of Diamond Offshore Drilling, Inc. (NYSE:DO). CGX said that it is a leading drilling contractor with over 40 years of global drilling experience. Drilling is expected to take approximately 60 days.
Steve Hermeston, President and CEO stated in the release, “Today marks a significant milestone in the history of CGX. We are returning to drill the Eagle prospect that was halted in June 2000 due to overlapping maritime border claims between Guyana and Suriname. Renewed exploration follows over seven years of dedication and co-operation between the Government of Guyana and CGX in resolving the Maritime Boundary between Guyana and Suriname peacefully and finally through the International Tribunal of the Law of the Sea (ITLOS) process. Following the resolution of the maritime border, CGX has shot two-3D seismic surveys, creating a portfolio of prospects on the Corentyne PPL, Eagle-1 being the first well to be drilled to test the original Eocene prospect, plus a deeper Maastrichtian prospect, both of which are stratigraphic tests.
The current location will significantly benefit from the 3D acquired in conjunction with advances in better understanding the optimal position to test reservoirs deposited in deep water environments.”
CGX Energy is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin.
The other well is being drilled in the Jaguar-1 site by Repsol’s Atwood Beacon. Drilling started on February 7 and could take six months as it goes to a depth of 21,325 feet.
With regard to safety, both CGX and Repsol said that they have containment plans in place in the eventuality of a spill or other mishap. In fact, there is being held today a stakeholder meeting at the Red House in Kingston to address emergency response expectations in the context of petroleum exploration drilling offshore. Minister of Natural Resources and the Environment Robert Persaud said last week that there will be teams coming from the Commonwealth and the US to help build capacity in Guyana as the country prepares for its fortunes in petroleum.
So far Repsol has expended US$52 million on its exploration operations and this figure is expected to reach a total of US$180 million. The CGX operation at the Eagle well will cost the company some US$55 million. While the cost to operate the Ocean Saratoga will be US$500,000 per day, it will cost US$650,000 per day to operate the Atwell Beacon.
Interest in the Guyana/Suriname basin amplified after explorer Tullow struck oil last year off of French Guiana raising the prospect of the opening of a major offshore oil producing province in South America and boosting its shares.
