Canadian energy company suspends oil exploration in Guyana

GEORGETOWN, Guyana (AP) _ A Canadian energy company searching for oil and gas in Guyana has suspended the five-year effort after the last of its three onshore wells came up dry, the firm said Thursday.

Toronto-based CGX Energy Inc. will ship back onshore rigs and other equipment to neighboring Trinidad after its third well at Albion, in eastern Guyana, produced no commercial oil or gas deposits, the company said in a statement.

“The well will be abandoned and drilling equipment shipped back,” the company said, adding it will assess geological data to decide whether to resume drilling in other areas later.

CGX arrived in 2000 to aid Guyana’s search for oil but ended up at the center of an international dispute with neighboring Suriname.

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 was later awarded an 800,000-acre (320,000-hectare) plot of land to explore in the Guianas Shield but never found commercial oil deposits.

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.

Guyana’s Geology and Mines Commission said Thursday it hopes other energy companies awarded exploration licenses will have more success.

GroundStar Resources, based in Calgary, Canada, is expected to begin drilling in Guyana’s southwestern Takatu Basin near the border with Brazil in late 2005. It’s the same area where another now defunct Canadian firm, Hunt Oil, found economic deposits in 1982 but left the country because of a dispute over production sharing with the government.