Canadian oil explorer CGX Energy Inc yesterday reported that the High Court here has upheld an injunction against Spanish oil producer Repsol Exploracion, S.A. that prevents the Spanish company from proceeding with any farming out of the Kanuku petroleum prospecting licence (PPL).
CGX Resources Inc, a wholly-owned subsidiary of CGX obtained an order from the High Court upholding the injunction from the Commercial Court restraining Repsol from proceeding with any proposed farm-out of the Kanuku PPL pending the hearing and determination of the arbitration proceedings commenced by CGX Resources against Repsol, the Canadian company said in a statement.
The erstwhile partners have been locked in a battle over the Kanuku licence. In December, CGX announced that it would commence arbitration proceedings against Repsol in connection with the expiry of the PPL relating to the Georgetown Block. At the time, CGX said that it is of the view that the terms of the joint operating agreement governing the Georgetown Block were still in effect when Repsol allowed the Georgetown PPL to expire and sought out a new petroleum prospecting licence covering virtually the identical acreage offshore in Guyana, now known as the Kanuku PPL.
CGX had said that Repsol was aware of CGX Energy’s continued interest in the Georgetown PPL and “had an obligation to seek renewal of the Georgetown PPL alongside CGX Energy.”
Yesterday, the company reiterated that the Kanuku PPL covers substantially the same acreage as the Georgetown PPL.
“We view this decision as strong support for CGX Energy’s rights in the Kanuku PPL and as the next step to regaining our participating interest in the acreage. A final resolution of this matter is in the best interests of not only CGX Energy, but also tangibly demonstrates the application of the rule of law in the very exciting Guyana-Suriname basin. CGX Energy has drilled the most exploration wells in Guyana and has extensive knowledge of the Guyana-Suriname basin. Further-more, we worked diligently to meet all of the obligations with respect to our 25% participating interest in the Georgetown PPL and will continue to do so in respect of all petroleum prospecting licences in which we participate,” Professor Suresh Narine, co-chairman of CGX was quoted as saying.
“Since 2012, CGX Energy has spent approximately US$130 million in exploration in the Guyana-Suriname basin with approximately US$40 million relating to the acreage now known as the Kanuku PPL. CGX’s total spend in the Georgetown PPL since inception has been approximately US$60 million. Given the significant investment already made in this petroleum prospecting licence, we are hopeful that this matter will be resolved quickly in the best interest of all parties and for the overall benefit of the continued exploration in the basin,” Dewi Jones, Chief Executive Officer of the company, added.
Searching for oil here since 2000, CGX saw two of its wells failing to hit commercial oil in 2012 – one wholly-owned and the other as part of a consortium. The 100 per cent CGX owned Eagle well was abandoned in May 2012 after it was found to be dry. The company together with the other partners at the Jaguar 1 well abandoned this site for safety concerns.
Last year, facing a demand from its partners for US$15 million sunk in oil exploration, CGX announced that it was entering into a private placement to raise Cdn$35 million – Cdn$40 million and its fellow Canadian oil explorer Pacific Rubiales Energy Corp subsequently gained control of the company.
