Suriname did not question CGX's licence before drilling started
- Sully
Key oil well results likely next week

By Patrick Denny in Canouan
Stabroek News
July 5, 2000

Despite claiming sovereignty over an area offshore Guyana, the Suriname government had never questioned the licence issued by Guyana to the Toronto-based company, CGX Energy Inc.

CGX President, Kerry Sully, told reporters yesterday in St Vincent and the Grenadines that at no time since the company was issued a licence in 1998, nor in the 18 months it took to negotiate the licence, was it approached or warned by the Suriname government about its activities.

Sully, who flew to Canouan Island where the CARICOM Summit is being held, with CGX Director Dennis Clemens in case they were needed, addressed the media at the press centre in the casino complex of the Carenage Beach Resort and Golf Club.

The CGX rig had been forcibly ejected from its drilling location in Guyana's maritime jurisdiction on June 3, by two Surinamese gunboats and efforts by the Guyana government to get the rig to return unhindered to its location have been fruitless. Since then it has been moved to another location and Sully said that by next week, the drilling results should indicate whether its efforts would be successful.

Sully said the company had a one in five chance of finding oil, which, in terms of exploration, was a very good ratio of success. Sully said that if CGX struck oil it would transform the economy of Guyana and Suriname.

About the June 3 incident, Sully said that the first contact was made by the Surinamese authorities on May 31, when a warning was issued to CGX. To questions about the forced removal of the rig on June 3, Sully said that the captain of the rig obeyed the orders of the Surinamese army fearing for the safety of his crew. The captain had reported the matter to his head office which had also advised that he remove. Sully said that in the 12 hours that the captain was given to remove the rig or face the consequences, the Surinamese gunboats remained in the area.

Clemens, who was with Sully at the press briefing said that the company had turned to the Canadian government for advice when it received the first warning on May 31, and was advised that it should allow Guyana and Suriname to resolve the dispute.

The Suriname government has denied that force had been used to get the rig to move and supplied a videotape which was broadcast to the region on Monday evening by the Caribbean Broadcasting Union. However, Stabroek News understands that the scene revealed the rig complying with orders to move. The ultimatum which was given to the rig captain at 12:45 am on June 3, was not a part of the video.

Briefing the Guyanese media covering the Summit on Monday, President Bharrat Jagdeo had said there was enough time for the Guyana Defence Force to have gone to the area, as he had been informed when the boats were dispatched to the location. He said he had decided against it because he felt that the matter should be dealt with at the diplomatic level. At that time too, he said, the foreign ministers of both countries were involved in arranging a meeting to discuss the issue.

Clemens said that CGX was the smallest oil company in the world but if it struck oil on its concessions it would be among the largest producers. He said that the company had spent some US$12 million in the area, more than any other company had done in the past nine years and would expend no more than Shell or one of the large companies would at this stage of the operations.

He said that CGX had raised US$16 million for the venture and its investors were committed to financing the various stages of its operations as the project moves forward.

Responding to questions as to why if CGX knew it was in a disputed area it did not approach the Surinamese authorities, Sully said that for 42 years there had been cooperation between Guyana and Suriname culminating in the 1989 agreement (concluded by then presidents of Guyana and Suriname, Desmond Hoyte and Ramsaywack Shankar), which led to the 1991 Memorandum of Understanding signed by Ambassador Extraordinaire and Plenipotentiary, Dr John Kolader of Suriname and Dr Cedric Grant, Presidential Adviser to the President of Guyana.

Clemens said that his company's shareholders had asked them to go to Canouan so that they could be on hand to speak to all concerned. Sully said, too, that they had used intermediaries to let the Surinamese authorities know of their presence and their availability to talk, but had not been contacted as yet.

Clemens said that reports of secret interests in CGX by persons in Guyana and Suriname were false, explaining that the company was a publicly regulated one and the names of its shareholders were accessible. He said that because of the various nationalities of the crew members on the rig, the situation was being closely observed by the US State Department as well as the Canadian and British governments.

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