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Oil Co. Abandoning Guyana Project

July 21, 2000

GEORGETOWN, Guyana (AP) _ Canadian oil company CGX Energy Inc. said it is pulling out of its Guyana oil exploration project Friday, its hopes to find billions of dollars worth of oil off South America dashed by a maritime boundary dispute between Guyana and Suriname.

The Toronto-based company was preparing to drill for oil on June 3 when Surinamese military boats ordered the rig to leave because Suriname believes the Guyana project crossed into its waters. Leaders from both countries on South America’s northeastern coast have met for five rounds of talks without any resolution.

CGX estimates that the disputed area holds 850 million barrels of oil, producing 200,000 barrels a day and earning dlrs 2 billion a year. The company tried to develop another well within its exploration area while the countries discussed their dispute, but that well struck dry.

The company announced in a statement late Thursday that it was ``extremely disappointed″ that the countries’ latest round of talks last week in Jamaica ended without an agreement. CGX said it will begin dismantling its rig Friday, but officials have not ruled out returning later.

``There appears to be a desire to restart these talks soon,″ company president Kelly Sully said. ``We will be watching closely to see how these develop.″

CGX has a 10-year concession to explore for oil in Guyana’s waters.

Sully said last month that his company believed the Guyana project could have brought both countries billions of dollars by attracting exploration projects along the Guyana-Suriname basin, which the U.S. Geological Survey estimates holds 15 billion barrels in oil reserves, more than 1 percent of the estimated world total.

Guyanese President Bharrat Jagdeo announced earlier this week that he will not continue talks with outgoing President Jules Wijdenbosch, but with his likely successor, Ronald Venetiaan. Suriname’s newly elected legislators have not yet convened since the May 25 elections to choose the country’s new president.

(uw-em)

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