The government of Guyana has issued a 30-day notice to terminate the exploration license for the offshore Corentyne block held by a joint venture between Canada-based CGX Energy and Frontera Energy. This decision comes after the companies sought an extension for their license to complete well-appraisal work and secure additional financing partners for the project’s development.

In a statement on Tuesday, CGX and Frontera confirmed that the Guyanese government believes there are no valid grounds to extend the license. The companies have been exploring alternative solutions to their ongoing dispute with the government regarding their rights to the Corentyne block. If an agreement is not reached, the dispute could escalate to arbitration.

According to the joint venture, they received a formal communication from the Guyanese government indicating that both the license and the associated petroleum agreement have been deemed terminated. However, the government has allowed the joint venture until February 22 to present arguments that might result in a reconsideration of the cancellation.

If the government’s position remains unchanged, the license will officially expire on March 10. The Guyanese energy ministry has not yet responded to inquiries regarding the situation. In December, Vice President Bharrat Jagdeo expressed confidence about the government’s stance in the event of legal proceedings.

Guyana’s oil sector is largely controlled by a consortium led by Exxon Mobil, and the development of the Corentyne block was viewed as a move to reduce the country’s reliance on the US-based giant. This block is now the sole remaining asset for Frontera and CGX in Guyana, following the relinquishment of two other blocks in previous years.

The joint venture has stated that it is exploring all legal options to defend its rights and will respond to the government’s notice accordingly.