Guyana’s bright gas and oil future
If there’s one country that’s got it problematic border issues that nation is Guyana. To the west, Venezuela claims about two thirds (159,000 square kilometers) to the Essequibio River. With Suriname, in the northeast it disputes a maritime boundary and in the southeast an uninhabited area of land called the New River Triangle.
Due to such border problems, companies like Toronto-based CGX Energy had had to suspend indefinitely exploration in the offshore Pomeroon License in the west next to Venezuela. Since June 2000, all exploration activity has ceased in the Guyana-Suriname Basin after the Surinamese navy evicted the company’s drill off its Eagle site in the Corentyne License.
While no gas or oil discoveries have been made to date offshore Guyana, or Guyana-Suriname waters, seismic tests have been promising. The United States Geological Survey’s World Petroleum Assessment 2000 estimates offshore Guyana housing as much as 42Tcf of gas and 15.2 billion barrels of oil.
It shouldn’t come to any surprise that Guyana is awaiting anxiously, possibly in August, a ruling by the United Nations International Tribunal on the Law of the Sea based in Hamburg will rule on the country’s maritime boundary dispute with Suriname. When the ruling is made, a new era may open up for the poor northern South American country.
So what’s Guyana going to do if it finds prodigious offshore gas and oil reserves? For one, the history of the country will enter a new era. CGX Energy, which has concessions to operate the Pomeroon License in the west and Corentyne License in the east, could see its share value rise handsomely. But the real winner will be Guyana, which could use the energy for power generation and industrial applications like smelting bauxite.
Up to now, Guyana has to export bauxite, which is smelted elsewhere.
Although it’s possible hydrocarbons reserves are not expected to turn Guyana into a Caribbean Kuwait, it’ll make it much richer and prosperous. But everything hinges on the PCA ruling.