Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin, CGX Energy, has canceled a partnership deal for the company’s proposed wharf and logistics yard in Berbice, Guyana.
CGX had entered into a term sheet agreement with an undisclosed potential partner regarding its Berbice Port Project back in April.
The company said it had provided the partner and its advisors a seventy-five day period to conduct further due diligence and allow the parties time to negotiate definitive documentation.
Following the expiry of the agreement, the deal was then amended, moving the deadline until August 20, 2016. After the amended deadline passed CGX decided not to enter into a definitive partnership agreement.
CGX said it had lost confidence in the partner due to the inability to confirm the financial capacity to complete the transaction proposed by the deal. As a result of the term sheet agreement, CGX received $50,000 as a non-refundable deposit from the partner.
Serafino Iacono, Co-Chairman of CGX, said: “Unfortunately, we abandoned the proposed transaction for a number of reasons, including as a result of the partner not being able to demonstrate the financial wherewithal to complete the purchase of the assets and fund the requisite capital expenditures required under our proposed partnership.
“Ultimately, the company could not risk entering into a definitive agreement with a partner that could not demonstrate a baseline ability to meet their financial commitments under the proposed terms of the transaction.”
The company said it is now actively seeking a new partner to help in the development of its Berbice Port Project.
In 2010, CGX secured a 50‐year land lease from the Government of Guyana for a 15.6 acres plot containing an existing logistics yard with 600 meters of frontage property at the mouth of the Berbice River. The project entails building a deep sea port to service the offshore oil and gas exploration industry in the Guyana-Suriname Basin.
CGX added that it in light of the recent drilling success of ExxonMobil, offshore exploration and production industry in the Guyana-Suriname Basin is ‘expected to expand dramatically.’
Since the Port of Georgetown lacks the ability to expand and cannot accommodate large ships due to low maximum draft, the Berbice Port Project is an opportunity to develop a main deepwater port facility in Northeast South America, CGX said.
Offshore Energy Today Staff