CGX abandons first Guyana find outside Stabroek

Market: Crude oil
07/03/22

Canadian independent CGX Energy, one of the early movers in Guyana's offshore oil exploration, has plugged and abandoned its Kawa-1 well on the shallow-water Corentyne block, five weeks after it announced an oil discovery at the well.

It was the first find in Guyana outside the prospective deepwater Stabroek block on which US major ExxonMobil leads a consortium that has made over 20 discoveries since 2019, with estimated recoverable resources of 10bn bl of oil equivalent.

The plugging of the CGX well will be a setback to the government's hopes for oil production outside Stabroek.

CGX Energy said the Kawa-1 well was never intended to be kept active following completion of the successful drilling campaign and that it was just a first stage exploration well. The company said it plans to spud a second well on Corentyne — Wei 1 — in the second half of this year, as the results from Kawa-1 had helped de-risk other targets on the block.

Kawa-1 encountered 200ft of oil-bearing reserves. It has been abandoned two weeks after the South American country's government said it would revise the terms of the 2013 production sharing contract with CGX Energy and its Canadian co-venturer Frontera Energy.

CGX Energy made the find 21 years after its initial effort derailed because of a border dispute. It was granted the Corentyne license in 1998 and stationed a rig in mid-2000 to begin exploration. But the military from neighbouring Suriname forced the company to abort the search because of territorial claims that were resolved in 2007.

CGX holds a 66.6pc operating stake in Corentyne with Frontera Energy holding the remaining interest. Both companies also have a similar shared interest in the shallow-water Demerara block that is west of and adjacent to Stabroek.

ExxonMobil's current output from Stabroek is 120,000 b/d and it projects reaching over 800,00 b/d by 2026.

By Canute James

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