Canadian oil company CGX Energy Inc has entered into an agreement with AGIP Guyana BV to acquire AGIP's entire 25% participating interest in the Georgetown Block, located offshore in the Guyana-Suriname Basin.

Commissioner of the Guyana Geology and Mines Commission, Robeson Benn, said government was aware of the arrangement between the two companies and had no objection.

Benn told Stabroek News yesterday that an ongoing work programme which had been filed by the primary holder of the concession was being followed.

"We are looking at the schedules and the work programme requirements and have worked out a satisfactory arrangement while dealing with the so-called area of overlap with Suriname," he said.

He stated that the border dispute with Suriname had stymied many of the work programmes for the offshore concessions in the area.

"We have been looking at arrangements with the companies within the flexibility of the work programmes," he said.

In the Georgetown Block, Benn said ongoing work included seismic reprocessing and three-dimensional evaluation.

He added that work also entailed the evaluation of the prospecting areas in comparison with those in Brazil and West Africa.

Benn pointed out that CGX was quite upbeat about the deep-water turbidite prospects offshore Guyana and the move to acquire the 25% was to expand its acreage in the area.

"It's an arrangement between two private companies and we have no objection. We would have to receive all the required documentation when it is finalised," he said.

The Georgetown Block licence is approximately 11,315 square kilometres and is located next to CGX's Corentyne Block to the east.

Maxus Guyana Ltd, a subsidiary of Repsol-YPF, holds the other 75% interest in the Georgetown Block and is the operator under a joint operating agreement with AGIP.

A press release issued by CGX on Monday quoted the company's vice president Warren Workman as saying: "Our analysis of the 1999 data is very positive. We have identified at least three turbidite structures running northwest from our Eagle and Wishbone structures. These features are comparable in a real extent to our Eagle and Wishbone targets. The most attractive feature is located next to Eagle and within three kilometres of Shell's 1974 Abary #1 well that had the most significant oil shows in the basin. The other two turbidite features are outside the area of overlapping border claims being made by the governments of Guyana and Suriname."

Maxus/AGIP had completed a joint seismic survey over both the Georgetown and Corentyne Blocks in 1999.

CGX's acquisition of the 25% interest is subject to certain conditions and would have to be approved by government.

The CGX release also quoted the company's president, Kerry Sully, as saying: "We are delighted to have an opportunity to increase our position in this potentially prolific basin as analysed by the United States Geological Survey assessment of world petroleum resources. When we close this acquisition, CGX will have an interest in five large turbidite targets identified on the seismic data."

CGX said the final terms of the deal will be released upon the execution of a sale and purchase agreement and receipt of the required consents.

CGX was famously ejected by the Surinamese navy from a drill site in Guyana's waters in June 2000. The matter is yet to be settled between the two countries despite a series of high-level encounters.

CGX is a Canada-based oil and gas exploration company with a 100% interest in a 3.8-million acre (15,464 sq km) concession offshore Guyana.

The United States Geological Service has identified the Guyana/Suriname Basin as having the 2nd highest resource potential among unexplored basins.