(Offshore Energy) Joint venture (JV) partners, Canada’s CGX Energy and Frontera Energy, have called on the Guyanese government to engage in talks and iron out the issues surrounding a license in the Corentyne block off the coast of Guyana. Otherwise, they intend to pursue legal avenues to assert and defend their interests in the wake of another license termination communication from the country’s government.
At the start of February 2025, CGX Energy and Frontera disclosed the receipt of a notification regarding the petroleum prospecting license for the Corentyne block in which Guyana’s government took the position that the permit, alongside the joint venture’s petroleum agreement, was terminated, with no reasonable grounds to grant any extensions to the joint venture regarding its appraisal or exploration obligations under the license or the petroleum agreement.
In an update on March 13, the JV partners confirmed the receipt of a communication from the government of Guyana, informing the joint venture that the government was of the view the petroleum agreement and prospecting license “are at an end,” and thus, the government “hereby terminates the petroleum agreement and cancels the prospecting licence with immediate effect.“
While addressing the received notice, CGX Energy and Frontera underline they remain firmly of the view their interests and license for the Corentyne block remain in place and good standing. Therefore, the JV denies termination of their petroleum agreement and invites the government of Guyana to “amicably” resolve the issues affecting the partners’ investments in the Corentyne block.
During the drilling of an appraisal well for the Kawa-1 appraisal program, the JV made the Wei-1 discovery in 2023 as its second one on the Corentyne block, claiming that it fulfilled the obligation under Phase 2 of the second renewal period of the original ten-year license.
With the aim of unlocking the potential of the Corentyne block, the duo set out to explore a potential farm-down of their interests in the block. Currently, the joint venture has a 100% working interest in the Corentyne block, with Frontera holding a 72% stake and CGX the remaining 28%.
“Should the parties not reach a mutually agreeable solution, the joint venture and its shareholders are prepared to assert their legal rights. The joint venture looks forward to expeditiously resolving this matter and continuing its multi-year efforts and investments to realize value for the people of Guyana and its shareholders from the Corentyne block,” underscored the JV.
Since 2015, the country has recorded many discoveries, with ExxonMobil proceeding to develop six projects and working to secure the go-ahead for the development of its seventh deepwater oil project in Guyana, which became an oil-producing nation five years ago and is working on bringing its first gas project to life.
The country’s Office of the Prime Minister recently gave the go-ahead for the planned $51.2 billion investment to advance its flagship gas-to-energy (GtE) project.
