Canada's CGX Energy to focus on Corentyne block instead of Demerara in Guyana

(Reuters) - Canada's CGX Energy said on Monday its joint venture with Frontera Energy would focus on their Corentyne block, offshore Guyana, and had no plans of drilling in the Demerara block this year.

The companies announced their discovery of an oil and gas reservoir off the coast of Guyana last month, with the Kawa-1 well in the Corentyne block finding about 177 feet (54 meters) of hydrocarbon-bearing reservoirs.

In December, CGX warned it might be required to seek additional financing to continue drilling the well. Costs associated with the well have risen to between $115 million and $125 million.

Frontera is the majority shareholder of CGX and its joint venture partner in the exploration of the Corentyne block.

The companies said they were currently in talks with Guyana regarding the Demerara block, which is located to the west of the prolific Stabroek block, operated by ExxonMobil with partners Hess and CNOOC International.

Guyana has been the scene of the world's biggest offshore discoveries in years, with 10 billion barrels of recoverable oil and gas confirmed since it began production in 2019.

(Reporting by Rithika Krishna and Nishara Karuvalli Pathikkal in Bengaluru; Editing by Anil D'Silva)