Page 9 - LatAmOil Week 30 2022

LatAmOil GUYANA LatAmOil

Thus far, Rystad noted, it has been able to keep 220,000 bpd by the third quarter of this year.
its offshore projects’ greenhouse gas (GHG) Meanwhile, work at Payara, the third develop-
emissions well below average global levels, prov- ment target at Stabroek, is ahead of schedule,
ing to be a leader in environmentally friendly and the field is now slated to come on line in late
practices as well as in production. 2023 and will deliver approximately 220,000 bpd
Guyana’s first upstream project is the Liza of oil.
Phase 1 Development, which ExxonMobil Yellowtail and Uaru, the fourth and fifth
brought on stream at the Stabroek block in development targets, which will deliver an addi-
December 2019. The field’s original production tional 250,000 bpd of oil apiece, are expected to
levels were 120,000 barrels per day of crude oil, come online in 2025 and 2026 respectively.
but recently completed optimisation work has Covering some 6.6mn acres (26,710 square
boosted this volume to 140,000 bpd, according km), the Stabroek block is operated by Exxon-
to the US giant. Mobil with a 45% stake, the US independent
ExxonMobil launched Liza Phase 2 Devel- Hess with a 30% interest and China National
opment in February 2022, and that project Offshore Petroleum Corp. (CNOOC) with a
expected to see production capacity reach 25% stake. ™

CGX, Frontera reach financing

deal for Wei-1 exploration well

CANADA’S CGX Energy and its parent com-
pany Frontera Energy revealed on July 22 that
they had struck an agreement with each other
on financing arrangements for Wei-1, the next
well in their exploration drilling programme at
the Corentyne block offshore Guyana.
Currently, equity in Corentyne is split
between CGX, the operator, with 66.7%, and
Frontera, with 33.3%, in line with the joint
operating agreement (JOA) signed between
the parties in January 2019. However, the two
Canadian companies have agreed to amend the
JOA in a way that effectively allows CGX to farm
out part of its stake to Frontera, with the equity
serving partly as compensation for the latter
party’s agreement to cover a large portion of
exploration drilling costs and partly as payment
in kind for the latter company’s previous loans
to the former.
More specifically, Frontera will, in exchange
for CGX’s transfer of 29.73% of its participating
interest in Corentyne, cover up to $130mn of the
costs incurred by the CGX/Frontera joint ven-
ture in drilling the Wei-1 well plus up to $29mn
in other costs associated with the drilling of Both drilling sites are in the northern section of Corentyne (Image: Frontera/CGX)
the Kawa-1 well, Wei-1 pre-drilling operations
and other activities. Additionally, Frontera will in Corentyne.
accept CGX’s transfer of 4.94% of its participat- Instead, it will have a 32% stake in the pro-
ing interest in Corentyne as consideration for ject, and Frontera will have a 68% participating
repayment of the principal still outstanding for interest, the statement noted. It did not reveal
two outstanding loans – a $19mn convertible whether CGX would relinquish its position as
credit extended in May 2021 and a $35mn con- operator of the block, which is already home
vertible credit extended in March 2022 – plus to one confirmed hydrocarbon discovery at
$3.8mn. Kawa-1.
The statement reported that the two Cana-
New majority shareholder dian companies were now expecting to spud
When these transfers of equity are completed, Wei-1 in October of this year but did not reveal
CGX will no longer be the majority shareholder the reasons for postponing drilling.

Week 30 27•July•2022 www. NEWSBASE .com P9