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Friday, September 21, 2007

U.N. favors Guyana in oil border spat with Suriname

U.N. favors Guyana in oil border spat with Suriname

Ank Kuipers and Sharief Khan, Reuters
Published: Thursday, September 20, 2007

PARAMARIBO, Suriname/GEORGETOWN, Guyana (Reuters) - A U.N. tribunal favored Guyana on Thursday in a ruling setting its border with Suriname in a century-old dispute over an oil basin off the eastern shoulder of South America in the Atlantic Ocean.

Canada's CGX Energy, which had operated in the disputed waters until Surinamese gunboats expelled the company in 2000, immediately welcomed the decision.

"It works very well for us," the company's chief executive, Kerry Sully, said in a telephone interview.

Guyanese President Bharrat Jagdeo declared it a "great day for Guyana" and said in a nationally broadcast address the ruling meant the Canadian company could resume its operations right away.

Oil and gas exploration in the area has been frozen because of the dispute.

In 2004, Guyana, a former British colony, took the dispute to the U.N. International Tribunal on the Law of the Sea over the demarcation of the border as it extends from a river into the ocean.

While Suriname lost its claim to the area believed to hold energy deposits, the former Dutch colony said it was glad the dispute was resolved and looked forward to developing resources on its side of the new border.

"If the area where CGX has been drilling is oil rich, then the Surinamese part will certainly have oil too," President Ronald Venetiaan told reporters.

Other companies that could be affected by the decision are Exxon Mobil, the world's largest company, and Spain's Repsol, which have expressed interest in working in the area, according to local media reports.

The tribunal said both countries had failed in their treaty obligations to find ways of cooperating in the area and ruled that Suriname had illegally ejected the Canadian company.

While the binding arbitration set a different border from the boundaries claimed by each of the neighbors, CGX Energy said the new line would allow the company basically to explore where it had hoped to.

In Vancouver earlier on Thursday, trading was suspended in CGX's shares due to the expected news. Its shares ended on Wednesday at $1.55, the highest closing price in years.

Guyana and Suriname, whose combined populations are less than 1.5 million people, have commercial links but limited cultural ties with the rest of Latin America.

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