The management of CGX Energy Inc is hoping that the Guyana and Suriname governments would reach an agreement, which would allow some exploration in the area of overlap to go ahead, the company's President Kerry Sully said yesterday.
CGX Energy Inc President, Kerry Sully (right) with GGMC Commissioner Brian Sucre at the Mining Week exhibition at the Umana Yana earlier this week. (Ken Moore photo)
Stabroek News
July 28, 2001
Sully was speaking at the closing session of the annual mining seminar sponsored by the Guyana Geology and Mines Commission at Le Meridien Pegasus.
He said that the only obstacle to CGX's interest was the time it would take for the two governments to reach an agreement, given that the term of its licence was for a ten-year period.
He said that recent reports of the discussions between officials of Guyana and Suriname indicate that the environment could be created which would allow the talks to go forward on exploitation of the natural resources of the area in dispute.
Guyana, in the talks last year, had proposed the joint exploitation and management of the area pending the resolution of the maritime boundary dispute between the two countries.
Sully, explaining why his company was still bullish on its concession here, said that the potential here was some 15.3 billion barrels of oil and 43 billion cubic feet of natural gas, according to the US Geological Service. He compared this to proven reserves of some five billion barrels in Canadian oil fields and the North Sea reserves of 43 million barrels.
He said, too, that the Guyana-Suriname basin in which his company's concession was located was ranked second in the list of unexplored basins. The oil, he explained, was estimated to be in 117 oil fields, 24 of which were said to have more than 100 million barrels and of these six were estimated to have more than 500 million barrels.
Sully said that were CGX to strike oil in one of the six giant fields, described as having more than 500 million barrels of oil, it would double the country's GDP and have a beneficial impact on the economies of Trinidad and Tobago, from which initially all of the infrastructure would have to be sourced, and Suriname.
He said that the impact on employment would be very beneficial as he was confident that the skills here could be trained to undertake work related to the gas and oil industry.
Classifying the risk of exploration in the Guyana-Suriname basin, Sully said that while the political risk had turned out to be higher than anticipated, the contractual risk was low. He said this was because Guyana's corporation law was based on Canada's corporation law and both Guyana and Suriname were signatories to the Law of the Sea Convention had strong associations with the US and Canada. The currency risk he described as medium since the majority of sales and expenses were priced in US dollars. However, he said that the commodity price risk was high with the break-even price being between US$10-US$15 a barrel.
He said that the chances of striking oil was one in five, explaining that the geological model of the basin was equivalent to that of the Campos Basin, Brazil and the structure similar in age to the turbidite reservoirs in the east Venezuelan Basin and Trinidad. He said that the reservoirs were of giant or near giant size.