CGX Energy and Frontera Energy to Explore Legal Options Following License Termination in Guyana

Joint venture partners, Canada’s CGX Energy and Frontera Energy, are facing a challenge after receiving a communication from the Guyanese government terminating their license for the Corentyne block off the coast of Guyana. The government asserts that the permit, along with the petroleum agreement, has been terminated, leaving the JV partners in a precarious position.

The government’s notification stated that there are no grounds to grant any extensions to the joint venture for its appraisal or exploration obligations under the license. It also serves as a 30-day notice of intention to cancel any other type of license that may exist, if deemed necessary.

Despite the government’s stance on the termination of the license, CGX Energy and Frontera are determined to defend their interests in the Corentyne block. They are evaluating all legal options available to assert their rights and respond to the government’s decision.

The JV partners remain firm in their belief that their interests in the Corentyne block are valid and in good standing, emphasizing that the petroleum agreement has not been terminated. They are committed to resolving the matter swiftly and continuing their efforts to realize value for the people of Guyana and their shareholders.

In 2023, the JV made the Wei-1 discovery while drilling a prospect on the Corentyne block, fulfilling obligations under the license’s renewal period. As part of their strategic plans, the partners are exploring the potential farm-down of interests in the block to unlock its full potential.

The duo has also engaged SIA, a Subsea7–SLB joint venture, to develop a conceptual field development plan for the northern portion of the Corentyne block, covering various aspects of production and export facilities.

Guyana has seen significant developments in its oil and gas sector since 2015, with ExxonMobil leading the way in project developments. The upcoming Hammerhead project is set to boost the country’s production capacity to nearly 1.5 million barrels per day by 2029.

Additionally, Guyana is working on its first gas project, with plans for a flagship gas-to-energy project receiving approval for a substantial investment. The country is poised for further growth in its energy sector, despite the challenges faced by JV partners in the Corentyne block.