Oil rig contracted for Georgetown Licence

Oil rig contracted for Georgetown Licence -CGX
By Stabroek staff June 25, 2010 in Local News

Canadian oil exploration company, CGX Energy yesterday announced that a rig has been contracted to drill on its part-owned Georgetown Licence, offshore Guyana.

The Atwood Beacon jack-up drilling rig is currently operating offshore the Ivory Coast with its commitment there expected to be completed in September. After this, the rig will be mobilized to Trinidad then sent to Suriname, where it will begin drilling the first of four wells in the Guyana-Suriname basin.

CGX said in a statement that the Atwood Beacon (operated by Atwood Oceanics Pacific Limited) was awarded three separate contracts by an Operator Group for work offshore Suriname and Guyana. The three-member Operator Group includes Repsol Exploracion S.A, which is the operator of the Georgetown PPL in which CGX holds a 25% participating interest. The Georgetown PPL is jointly held by the operator, Repsol Exploracion SA (15%), YPF Guyana Limited (30%), Tullow Guyana BV (30%) and CGX (25%).

The contracts provide for a programme consisting of four wells at an operating day rate of US$115 000 and has a minimum duration of 210 days.

Atwood Oceanics said in a statement that the Operators will pay a lump sum mobilization of US$4.5M to Trinidad and will pay a day rate of US$110 000 plus tugs and fuel for the estimated seven days required to mobilize from Trinidad to the first well location in Suriname.

CGX said it is in discussions with Atwood and the Operator Group to add a fifth well to the programme for CGX’s 100% owned and operated Corentyne PPL.

Atwood said upon completion of the programme, the Operators will de-mobilize the rig to Trinidad at a day rate of US$110,000 plus tugs and fuel, and will additionally pay a lump sum demobilization of up to US$7 835 250 depending on the location of any follow-on work; provided, however, neither the day rate nor the lump sum will be paid if the rig has follow-on work within 800 miles of the last drilling location.

Last week, CGX said it now expects to commence drilling here next year after earlier saying that drilling could begin here in the latter part of this year. CGX has pushed back the expected drilling start a number of times. In a statement, the company said that the Jaguar well on the Georgetown PPL is planned to be drilled in the first half of 2011 while the Eagle well will be drilled after.

CGX is managed by a team of oil and gas and finance professionals from Canada, USA and the UK and is financed internationally and has shareholders worldwide. The company has been wrapped up in the quest for oil here for over a decade.

In June 2000, its rig was chased out of Guyana’s waters by Suriname gunboats as it was about to embark on drilling a well in the most promising area. This led to a diplomatic crisis between Guyana and Suriname and years of futile talks. The deadlock was broken when Guyana took its case to the International Law of the Sea tribunal and secured a ruling largely in its favour in 2007. Since then expectations have been high over CGX resuming its oil search.

In November last year, the company’s president Kerry Sully told President Bharrat Jagdeo during a meeting that CGX would drill offshore of the Corentyne in the second half of this year. The meeting followed Jagdeo’s public statement earlier in November that the company needed to move beyond talk and on to drilling.