GEORGETOWN, Guyana (GINA) -- Canadian-based oil and gas exploration company CGX will soon be taking another shot in the Guyana basin, through a joint venture with its major shareholder Pacific Rubiales.
On Wednesday, CGX announced that it has entered into a binding term sheet with Pacific Rubiales Energy Corp. and, having recently acquired newly re-issued Corentyne, Demerara and Berbice licences, the way has been paved for the company to “cultivate exploration.”
Pacific Rubiales has also decided to pay off debts owed by CGX for oil exploration in the Guyana Basin.
CGX executive chairman Dr Suresh Narine, who accompanied a team of executives from both companies to a meeting with Guyana’s President Donald Ramotar on Wednesday, said the priority is on an aggressive work plan that amounts to hundreds of millions of US dollars.
“With Pacific’s increased interest in CGX, it means that we have untapped technical expertise in this basin which is second to none,” Narine said in an invited comment.
Pacific Rubiales is regarded as the largest independent oil company in Latin America, with success ratios in Columbia of 83 percent, and similar records at bases in Peru, Brazil, Guatemala and Papua New Guinea.
The company owns 100% of MetaPetroleum Corp, which operates the Rubiales, Piriri and Quifa heavy oil fields in the Llanos Basin, and 100% of Pacific Stratus Energy Colombia Corp., which operates the La Creciente natural gas field in the northwestern area of Colombia, according to a CGX release issued on Wednesday.
It’s chief executive officer Ronald Pantin, who was part of the team meeting with Ramotar, described Guyana’s territory as one with great oil prospects and with the company’s additional investment pursuits in agriculture, iron and the gold mining sector, it is also hoping to make inroads.
The CGX release stated that Pacific Rubiales currently owns shares representing 35.06% of the company’s issued and outstanding common shares and is an insider of the company.
The company was expected to announce on Thursday exactly when it will recommence drilling and, according to Narine, it will be more vocal in its relations with the public and social responsibility.
Despite not being successful at the last exploration attempt, optimism is still high about the basin’s oil resource potential of 13.6 billion barrels according to an estimate by the United States Geological Survey in their assessment of undiscovered conventional oil and gas resources of South America and the Caribbean.
The results of the survey had spawned the interest of oil exploration companies such as CGX, Repsol, Tullow Oil, YPF and Exxon Mobile through independent or joint venture operating.
CGX intensified its pursuit after its semi-submarine rig arrived from the Gulf of Mexico in January last year but, after coming up empty at one of the locations, the company didn’t lose hope.
The Guyana government remains focused on keeping the basin active with the hope of a discovery that has potential to leapfrog Guyana as a major oil and gas producer, according to Minister of Natural Resources and the Environment Robert Persaud who was also part of Wednesday’s talks.
Having been granted the licences and established partnership with a reputable affiliate, Persaud believes the way has been paved for activities to kick start within the requisite time frame.
“There is some level of impatience, but we understand also that there are certain efforts that have to be made prior, but we are confident and we trust … the company and its partners in this regard,” Persaud said.
On February 13, CGX announced its receipt of two new petroleum prospecting licences from the Guyana government, for CGX Resources and ON Energy respectively.