DESPITE falling oil prices on the international market, Guyana’s push towards oil exploration leading to eventual commercial operations remains feasible, with CGX Energy Inc investing in excess of US$300M over the past six years, US$20M of which was spent last year alone.This disclosure came over the weekend when Chief Executive Officer of CGX Energy Inc, Professor Suresh Narine, provided an update on the industry and the company’s operations, in light of the prevailing international conditions with declining oil prices.

Speaking to the prevailing price of oil on the world market, Professor Narine told media operatives that just as it is the case with other oil companies across the globe, CGX is concerned about the falling prices.

“All oil companies, not just CGX are very concerned about the price of oil…if the price of oil continues to go down then I think many oil companies will be revising their strategies,” according to Professor Narine.

The CGX top brass did point out that “for us we are not worried at this point…we still feel comfortable that the Guyana basin offers enough reward to take the risk, so we are going full ahead but we are looking very carefully at the price of oil.”

Questioned as to when pursuing oil will no longer be economically feasible, Professor Narine explained that given the varying number of factors, this is difficult to predict, but he noted that optimistically the falling oil prices could very well be a good thing for Guyana.

He said that if the price of oil were to fall to a point where certain companies would ‘go under’ then there would be an abundant availability of rigs on the marketplace which will inevitably lead to the price of drilling for the precious crude plummeting also.

CGX currently operates only in the Guyana/Suriname basin and over the past six years of its operations, more than US$300M has been invested by the company, representing more than 65 per cent of all monies ever expended in that oil basin, “so we are not about to give up.”

According to Professor Narine, the business is cyclical in nature, but “we are so excited about the basin, its prospects and moreover what this can mean to Guyana.”

TRANSFORMATIONAL
A commercially viable find of petroleum in Guyana will transform the country within a short space of time, said a confident Narine.

He conceded that while oil exploration is a difficult business, CGX’s operation in Guyana is funded entirely based on investors and “people invest because they feel there is a good opportunity at finding oil.”

Seeking to bring perspective to the entire operation, Narine reminded that the world has been in the throes of a prolonged recession but, “CGX despite going through some very hard times in 2012 and 2013 has managed to secure a very large partner called Pacific Rubiales which is Latin America’s largest producer of petroleum.”

VERY HIGH SUCCESS RATE
This company, he said, has a very high success rate at finding oil whenever its explores—a track record of 8.5 out of 10 times, which geologically is exceedingly high, according to Narine.

He noted that with the injection of technical acumen (insight) as well as financing from Pacific Rubiales, CGX has managed to reverse the poor conditions experienced in 2012.

The Professor reminded that in 2012, two wells had been dug and while the wells had demonstrated an active petroleum system, there were not commercial quantities available at those locations.
This led to the CGX stocks taking a beating on the international market, hence the move to invite Pacific Rubiales into a partnership.

This move, according to Narine, led to CGX last year completing the shooting of 3D Seismic Surveys on the Demerara block costing in excess of US$20M.

Narine stressed the importance of this venture by pointing out that it represents work undertaken, four times greater than what was initially scheduled for last year.
“We spent four times the amount of money because we are so excited about the seismic in the area,” said Narine.

Last year, according to Narine, was a year of rejuvenation, renewed interest, vigour and confidence in CGX and its operations in Guyana.
He said too that at present the company is undertaking aerial surveys on the Berbice onshore block, an undertaking that has never been done before.
Looking forward to CGX’s operations as the year unfolds, Professor Narine told media operatives, “We plan to drill a well in 2015.”

(By Gary Eleazar)