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Regional News

December 21, 2011
Guyana grants CGX Corentyne deferral
Upstream

The government of Guyana has granted Canadian player CGX Energy a deferral to drill an offshore exploration well in the company’s Corentyne licence. 

The deferral will allow CGX to complete its minimum work programme in the Guyana-Suriname basin, which includes one exploration well with the option for another appraisal well.

Guyana-focused CGX has been licensed to drill on the Eagle prospect since 1998, when it was granted a 10-year permit. But the company became ensnared in a maritime border dispute between Guyana and Suriname, and watched as a rig it had contracted in 2000 was chased off the site it was preparing to drill by Suriname gunboats. 

The border dispute was settled in 2007, at which time “the clock was reset” on the company’s permit, chief executive Steve Hermeston told Upstream. 

The company is now set to spud its 100%-owned Eagle-1 well, which will explore the Eocene and Maastrichtian formations at an expected total depth of 4,300 metres. 

Guyana had required CGX to drill the well by the end of this year, but the rig the company had contracted was not available at the expected time. The government granted the deferral to signal that there were “no issues regarding the sanctity of contract” with Guyana, Hermeston said. 

CGX has contracted the Diamond Offshore semi-submersible Ocean Saratoga to drill Eagle-1 at a dayrate of $282,150, according to Diamond’s latest fleet status report. Eagle-1 is expected to take 60 days to drill. 

The rig is currently wrapping up a workover for Walter Oil & Gas in the Gulf of Mexico. It will be mobilsed to the Guyana-Suriname basin early next month and should start drilling around 18 January, Hermeston said. 

The Eagle-1 drill site lies in about 250 feet of water. 

“This will give us deep-water IP rates and recovery rates with shallow-water economics and development costs,” Hermeston said. 

Prior to the border dispute, CGX had planned to drill its first well on the concession at another location. But 3D seismic data has since revealed a "more optimal location" to drill, Hermeston said. 

CGX will need to contract another rig if it chooses to probe the Eagle Deep prospect, also in the Corentyne licence, because the Ocean Saratoga does not have a sufficient blowout preventer, Hermeston said. 

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