Viable oil reserves could be discovered in Guyana in 12 months – CGX head

The Chief Executive Officer (CEO) of CGX Energy Incorporated, Kerry Sully, has said that oil in commercial quantities could be discovered offshore Guyana in the Guyana Basin within the next 12 months, and Guyanese can benefit from such a discovery. He made these remarks during the 15th Annual Guyana Manufacturers and Services Association (GMSA) Dinner and Awards Ceremony, last Thursday.

Sully explained that the Canadian oil exploration company started negotiations with Guyana in 1996.

Since that time, CGX continues to make all the necessary preparations. It started to explore the Guyana Basin following positive results which indicated the presence of oil through research and surveys. These surveys were done by the International Energy Agency and the United States Geological Survey.

Sully said, “We think there is a tremendous amount of opportunities, not only in the exploration of oil, but also in the industry for gas for Guyana.” He explained that in offshore Guyana, French Guiana and Suriname, there have been only 22 wells drilled in a 52-year period, which generally have fully explored or penetrated the sea bed.

In 1975 there was a well drilled by Shell called the Abary Well, which had an in-well blow occurring beneath the surface of the earth and resulted in the discovery of some crude. Sully pointed out that the crude found was of high quality, and it is considered the best in the world.

The CGX CEO explained that an oil find similar to that which occurred in Sierra Leone and Ghana some three years ago is likely in the Guyana Basin. Sierra Leone-Ghana find is one of the company’s largest discoveries. Sully noted that one of the world’s best oil explorers, currently in Suriname, has already indicated that there is a high possibility of oil and natural gas being found offshore Guyana. 

He noted that CGX, which came to Guyana in 1998, was the first to bring the seismic technology which produces clearer images of the earth below 10,000 feet of sea, giving a better picture of what to expect.

Sully said that, within the next 12 months, CGX will be drilling six wells offshore the Guyana Basin of Takutu, and drilling will soon take place in Suriname in rocks as old as a trillion years which contain massive amounts of oil. Sully stressed that rocks of the same age will be drilled via the Jaguar One well offshore Guyana. This will be done with the help of Repsol (a Spanish oil exploration company).

Sully stressed that even if oil is not found within the stipulated period, there is a higher chance of a discovery in the following year. “Right now, all eyes of agencies are on the Guyana Basin,” he noted, highlighting Guyana’s leadership in the fight against climate change.

The world produces and consumes 88 million barrels of oil each day, burning about a billion barrels of oil every 12 days.

It is predicted that the world will need to produce 100 million barrels of oil each day by 2035. He noted that there has been a decrease in the production of oil and natural gases, and therefore there is a great need for new sources. With the new venture to be undertaken by CGX, the Guianas will be able to fill the gap to reduce high oil prices.

Sully said also that he estimates that Guyana will be able to produce 50 million barrels of oil or 140,000 barrels of oil each day. This will rank Guyana close to other oil producing countries like Colombia and Brazil. Guyana is expected to receive 50 percent of the profits.

“Guyana’s 2007 revenue was GY$80.3 billion, but with my discovery, it is likely to increase that amount three or more times,” Sully noted. 

He also said that because of Guyana’s small population, everyone is likely to benefit tremendously.

He added that the natural gases present could also boost Guyana’s manufacturing sector, enabling the country to become major producers of many needed items. Most importantly, oil revenues can be used to develop hydro power in the country.

Sully added that there will also be a possibility of an alumina complex opening up in Guyana, which will make more use of its bauxite.

With the alumina operations, Guyana should be able to produce aluminum to make wires, roofing material, tables and chairs, wheels, auto parts, cables, rods, and many other similar products.

CGX has already bought a plot of land near the estuary of the Berbice River. This, the CEO says, could become a port, which could mean more opportunities to further develop Guyana. 

CGX currently holds licences for three areas off shore – Corentyne 100 percent, Georgetown 25 percent, and Pomeroon 100 percent.

CGX is managed by a team of oil and gas and finance professionals from Canada, USA and the UK. The company has been wrapped up in the quest for oil here for nearly a decade. However, in June of 2000, its rig was chased out of Guyana’s waters by Surinamese gunboats as it was about to drill 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 that oil would be found when CGX resumes its search.