A joint venture formed by Canada-based firms CGX Energy and Frontera Energy on May 9 said results from a well drilled in Guyana's offshore Corentyne block showed the presence of light oil and gas condensate.

"The joint venture encountered hydrocarbons in multiple zones," the companies said in a press release, following completion of drilling activities at the Kawa-1 exploration well and detailed studies by independent third-party laboratories.

The companies did not say how much oil was found or whether the finding could be commercial.

The joint venture is expected to be the next consortium in moving oil exploration projects in Guyana to the development phase if discoveries are declared commercial, after a group led by Exxon Mobil found about 11 billion barrels in recoverable oil and gas resources and began output in 2019.

Guyana's Natural Resources Minister Vickram Bharrat last week said players at the Corentyne block will need a new production sharing agreement (PSA) the government has started drafting, which is expected to increase royalties and revamp other terms contained in the Exxon-led consortium agreement.

Frontera and CGX Energy plan to drill a second exploration well in the second half of the year at the Corentyne block, the Wei-1 at a depth of 1,912 feet (582 meters) in the water. More exploration and appraisal wells might be drilled before reaching a final investment decision, executives from the firms said during a presentation on Guyana.

The companies also said they continue in talks with the Guyanese government about another block in Guyana, Demerara, where there is no drilling planning for this year even though the prospective license to do so gives the companies until February 2023 to drill a well.

CGX Energy is also building a deepwater port in Guyana's Berbice region that is expected to service oil and gas companies, commodities traders, container ships and cruise lines.

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