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Canadian Energy Company to Drill in Guyana
Monday May 9, 3:19 pm ET
By Bert Wilkinson, Associated Press Writer
Canadian Energy Company to Begin Drilling for Oil and Gas Onshore in Eastern Guyana


GEORGETOWN, Guyana (AP) -- A Canadian energy company will begin drilling for oil and gas onshore in eastern Guyana, five years after Suriname's military expelled it from a disputed area in waters off both South American countries, an official said Monday.
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Toronto-based CGX Energy Inc. will begin boring the first of at least four wells later this month, company co-director Edris Dookie said.

The onshore rig was expected in Guyana since last year but was delayed by the turbulent 2004 hurricane season and floods in Guyana in January and February, Dookie said.

CGX was awarded an 800,000-acre (320,000-hectare) plot of land to explore two years ago and said it remains hopeful of a commercial oil or gas find in the Guianas Shield.

The U.S. Geological Survey says the area contains up to 15 billion barrels of untapped oil. The Guianas Shield includes Guyana, Suriname and French Guiana.

CGX is collaborating with On Energy, a Guyana-registered company. "We expect begin drilling in a few weeks at a level of between 4,000 to 6,000 feet," CGX co-director John Cullen said.

While drilling at an offshore concession in a disputed area off the two countries in mid-2000, Surinamese gunboats expelled a CGX rig, bringing the two countries close to war. Military aircraft from both countries breached each other's airspace and heavily-armed soldiers lined coastal borders.

Five rounds of meetings in five different countries failed to break the deadlock and Guyana has since taken the matter to the U.N. Law of the Sea tribunal for resolution. Suriname later filed a counterclaim. A ruling is expected in two years.

CGX said it has so far invested about US$5 million, much of it raised on the Canadian stock market, and lost as much as US$10 million from the controversy surrounding the dispute in 2000.





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