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Last updated: 13 November, 2008 - Published 15:09 GMT
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Guyana eyes oil riches
Oil rig
A rig like this in the Gulf of Mexico could become a standard sight off Guyana
It has become a cliché to call Guyana the potential bread basket of the Caribbean.

But this agricultural and mining country is eyeing a new moniker -- energy basket.

A flurry of recent activity involving energy companies points to a sustained period of exploration for oil and gas in Guyana's waters.

The area concerned is part of the Guyana-Suriname Basin, which is potentially rich in oil.

The US Geological Survey says the area has one of the largest unexplored oil basins in the world.

It estimates recoverable oil reserves of 15.3 billion barrels and gas reserves of 42 trillion cubic feet.

A successful conclusion to drilling would transform Guyana, one of the poorests countries in the hemisphere, into an oil exporter.

Drilling freeze

In recent weeks, international companies have been discussing exploration plans with government officials.

Guianas map
Guyana has had longstanding border problems with its neighbours

The resumption of oil activity follows a ruling last year by the United Nations to set a maritime border with Suriname -- in favour of Guyana.

Surinamese gunboats expelled a Canadian company from an offshore oil concession in then disputed waters in 2000, prompting a freeze on exploration.

On October 30, Esso (ExxonMobil) and the Guyana government signed signed a supplement and addendum to the former's existing oil-prospecting licence and oil agreement.

They deal conforms to the new maritime boundary and reschedules the term for ExxonMobil to comply with its work obligations.

The head of Guyana's state petroleum agency, Newell Dennison, has said that Spain's Repsol YPF and Canada-based CBX Energy Inc. have already begun searching as well.

He also said Canada-based Groundstar Resources Ltd. plans to invest $12 million in a search for onshore oil and gas near the southwestern border with Brazil.

While on paper, the prospects look dazzling, a "dry hole" drilled earlier this year in offshore Suriname raised questions about the commercial viability of the basin.

But some experts said it was too early to reach a firm conclusion.

'Next big thing'

Suriname is also looking at cashing in on the new interest, despite those disappointing results at a well drilled in a block operated by Repsol-YPF.

Suriname's state oil company Staatsolie will open a round of bidding by oil companies on Nov 18.

Canada's National Post newspaper has said in a report that the Caribbean Basin, particularly the Suriname-Guyana block, could well be the next big thing in the world of oil and gas.

But it added: "Investors should be warned; the opportunity to cash in on the area's new and exciting potential discoveries comes with a host of uncertainties and will require a great deal of patience."

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