Frontera Energy Corporation and CGX Energy Inc. have issued an update regarding the legal status of the Corentyne block, located offshore Guyana. The controversy centres on the validity of the withdrawal of operating rights by the local government, challenged by both companies, which state that their licence remains valid.
Consultations on contract validity
The dispute began after formal notification sent by Frontera Energy and its subsidiaries to the Guyanese authorities in March, alleging breaches of the United Kingdom – Guyana Bilateral Investment Treaty and the local Investment Act. This process initiated a three-month negotiation period in an attempt to resolve the dispute. According to the government of Guyana, the partnership’s interest is said to have expired in June 2024. However, the authorities have left open the possibility of a final meeting with investors in October, stating that a decision regarding this meeting will be communicated in September.
The partnership comprising Frontera Energy Guyana Corp and CGX Resources Inc. maintains its position on the validity of its rights and the continuity of the petroleum contract. The companies insist that the agreement has not been terminated and invite the parties to seek an amicable resolution.
Partnership structure and economic interests
The joint venture holds a 100% stake in the Corentyne block, allocated at 72.52% for Frontera Guyana and 27.48% for CGX Resources Inc., following a 4.52% transfer agreed between the companies in 2023. This allocation remains subject to the approval of the Guyanese government, which has not yet validated the transaction.
Given the current stalemate, the project partners assert their readiness to exercise all legal rights if no agreement is reached. The strategic value of the Corentyne block, in a region characterised by significant offshore investments, highlights the importance of these proceedings for the wider regional oil sector.
