Well to be sunk in Atlantic oil search - CGX rig should be here soon By Andrew Richards Stabroek News October 11, 1999 Exploration company, CGX Resources Inc, is set to put down a well worth millions of US dollars in the Atlantic Ocean to drill for oil in its offshore concession before the end of the year. This major step in CGX's investment is being done in advance of its scheduled work programme. Under the contractual arrangement with government, the company was not required to proceed to this phase until next year. Another company, Century (Guyana) Ltd, is also expected to install a rig in the next few months. "This is good for us. We encourage companies to get to the drilling stage as soon as possible. We are very encouraged that CGX is moving in advance of the commitment it is contracted to," said Newell Dennison, head of the Guyana Geology and Mines Commission's (GGMC) Petroleum Unit, who made the disclosure when contacted by Stabroek News on Friday. Dennison recalled that it cost another oil exploration company, TOTAL, funds in the region of US$10 million in 1991 to drill a well of 3,000-metre depth in its concession which stretched from a point in line with the Essequibo River to the Berbice River. He said that the depth of the water in the Atlantic Ocean of TOTAL's now scrapped concession is almost the same as that of CGX's. CGX has begun to mobilise equipment to begin work soon and a drilling company has already been contracted, Dennison stated. Preparations are in train to spud the well--the stage before actual drilling takes place. CGX had a commitment this year to conduct 1,800 kilometres of two dimensional seismic surveys. Dennison said this was completed in May and the data acquired was processed and has been partly interpreted. According to him, an examination of the data received confirmed some of the structures previously identified as possible targets for drilling. He pointed out that the results of the seismic tests reduced the risk attendant to deciding upon a target to drill. CGX was granted an extension by government to its concession acreage in December. The initial concession consisted of approximately 12,800 square kilometres. It is now conjoined with an area consisting of approximately 5,400 square kilometres. Century was supposed to have begun drilling since last year under its agreement but encountered some constraints including the low oil price. Government granted the company an extension and it has completed its sea bed analysis. Dennison said CGX and Century will co-ordinate their operations to tackle the drilling of the two wells, in an effort to cut costs. Century will be drilling in the same water range as CGX and the rig the latter will engage could drill both wells, he stated. It is not unusual for companies to "piggy back" on each other, he said, the most recent being with CGX and Maxus (Guyana) Ltd where they co-ordinated efforts while conducting seismic studies. Dennison said that in the event of the discovery of oil in commercial quantities, companies have the option of engaging in additional drilling to determine the extent of the find. If oil is not discovered when the well is drilled, there is the option of going back to the drawing table to reassess the seismic data, he said. Dennison stated that even though sometimes there is no discovery of oil in commercial quantities after drilling, the data gathered would be helpful to any future expedition working in the area. Another company, Exxon, is conducting exploratory work in deep water territory of approximately 15,000 square miles. Dennison said the company is gathering data and will reveal its plans before the end of the year. A © page from: Guyana: Land of Six Peoples