President and CEO of CGX Energy Inc Kerry Sully says high oil prices are making the search for a seismic vessel difficult, but the company was working with some contractors with the hope of commencing seismic work during this year.
However, because the company isn’t drilling just yet, high oil prices do not represent good news. Oil has risen to a high of US$108 per barrel in the last few days.
Sully said that as of now, there is a possibility that the seismic work could begin during this year, once a rig has been procured – but no drilling.
Sully said the previous announcement that the drilling could possibly start before the end of 2008 was a premature one and was based on the timelines that were being worked with prior to the Guyana Suriname arbitration award in September 2007.
He expressed satisfaction at the level of facilitation of the government and the Guyana Geology and Mines Commission (GGMC) in the process and said that everything is going as planned.
In June 2000, a rig leased by CGX from an American drilling contractor and operating under licence from the Government of Guyana was forced off its Eagle location by Surinamese navy gunboats. Guyana subsequently moved to the International Tribunal for the Law of the Sea and an award was handed down in its favour last year.
After the announcement of the award, Sully had said that the decision was “extremely positive for CGX”, as it concluded that 93 per cent of CGX’s Corentyne Licence and 100 per cent of its Georgetown Licence fell in the territory awarded to Guyana.
In December, the CGX President had indicated that if the company in a joint venture effort had been able to procure a seismic rig earlier than expected, then the drilling could have commenced before 2009. The company has also announced that it has retained Jefferies, Randall & Dewey, a division of Jefferies & Company Incorporated, as its advisor to market the joint venture opportunity on its Corentyne Petroleum Prospecting Licence (PPL) located offshore Guyana.
Sully had expressed encouragement at the level of interest that has been expressed in the joint venture process.
During the last year, CGX had received a number of unsolicited expressions of interest from international oil and gas companies regarding the possibility of participating in the exploration of the Corentyne PPL.
Sully had said in December that the shooting of 500 square kilometres of 3D seismic before drilling was a good idea since this would accurately pinpoint the opportunities for oil better than the 2D seismic – done around 1999 – could have. Sully had said that the company has the funds (US$15 million) to finance the seismic work.
Oil companies Exxon and Repsol YPF are also in the process of getting their seismic work done in the hope of commencing drilling off Guyana’s coast come 2009.
