Frontera, CGX to see first oil in Guyana by 2030, seek partners

By Marianna Parraga (Reuters) – Frontera Energy (FEC.TO) and CGX Energy (OYL.V) expect to make a final investment decision by 2026 on developing a promising Guyana offshore block, with first oil output potentially by 2030, executives from the companies said on Monday.

The Frontera-CGX joint venture could become the next group to advance an oil and gas exploration project in Guyana after an Exxon Mobil-led (XOM.N) consortium. That group began output in 2019 and is this year producing some 400,000 barrels per day.

U.S. investment banking firm Houlihan Lokey has been retained to help Frontera and CGX “pursuing options” for a possible deal to find partners for developing the Corentyne block’s potential, they said in a release.

The appraisal of the entire area is expected to be finished in 2025. If a positive final investment decision is made, the consortium would move to topsides construction for a floating production storage and offloading (FPSO) vessel, drilling and subsea architecture.

The companies and subsidiaries had exploration licenses for several large blocks in Guyana, but following discussion with Guyana’s government, in 2022 they agreed to focus on Corentyne.

Guyana recently received bids from international and local firms for eight new blocks to be awarded soon.

The joint venture retained Subsea Integration Alliance (SIA), an oilfield services group by SLB’s (SLB.N) OneSubsea and Subsea7, to complete a conceptual field development plan for Corentyne, it said during the presentation.

The timeline for Corentyne’s development comes after the firms analyzed data from the Wei-1 exploration well, where they identified medium sweet oil, but they have not yet estimated the area’s full potential, said Mark Zoback from CGX’s board of directors.

The venture has identified gross prospective resources of between 514 million and 628 million barrels of oil and gas in the Maastrichtian horizons alone, and additional potential in the deeper Campanian and Santonian horizons.

“We are working on the deeper zones, it’s high priority,” Zoback said.

Frontera and CGX believe that the rock quality discovered in the Maastrichtian horizon is analogous to that reported in Exxon’s Liza discovery.