Canadian Oil Firm Looks for Ways to Keep Guyana’s Offshore Block
December 13, 2024
Toronto-listed Frontera Energy and partner CGX Energy are seeking alternatives to resolve a dispute with Guyana over rights to retain an offshore block where they found oil, but should they fail to reach an agreement, the matter is set to go to an arbitration court, the vice president said.
Guyanese Vice President Bharrat Jagdeo said in August the government had opted not to approve the companies' application to appraise a discovery in the block, which would have given them more time with the license, as the South American nation was not confident the firms could find a financial partner.
On Thursday, Jagdeo said there was no doubt Frontera and CGX failed to comply with some terms of the license, but if they have a different interpretation, the parties can go through the legal process established in the agreement.
"We are not worried about it going to court," he told reporters in a press conference.
According to the agreement's terms, if parties do not resolve a dispute in a 60-day period after the joint venture's partners notify the government of the disagreement, they can go to arbitration or a sole expert.
Frontera and CGX Energy said earlier on Thursday they were "firmly of the view that the Corentyne block Petroleum Agreement remains in place."
"The joint venture ... has sent the government of Guyana a letter activating a 60-day period for the parties to the Corentyne block Petroleum Agreement to make all reasonable efforts to amicably resolve all disputes via negotiation," they added in the release.
Jagdeo said he had not seen the letter.
Analysts and experts were expecting Corentyne to be the next area to be developed in Guyana, which could have added diversity to an industry completely dominated by a consortium led by U.S. major ExxonMobil.
Corentyne is the only area Frontera and CGX have left in Guyana, after returning two other blocks to the state, Demerara and Berbice. In 2022, the companies announced the presence of light oil and gas condensate in Corentyne and have focused their efforts there since.
A CGX subsidiary has a separate project in Guyana for a $130 million port, which is starting commercial operations this month after the company negotiated long-term agreements for its use, it said. The port can accommodate vessels of up to 150 meters (492 feet) long.
(Reuters - Reporting by Kemol King in Georgetown and Marianna Parraga in Houston~Editing by Keith Weir and Sandra Maler)
