Drilling is expected to begin in late 2010 in the Corentyne region, company president Kerry Sully said.

Toronto-based CGX identified the location in June 2000 but was forced off site when Suriname claimed ownership of it.

United Nations tribunal

A United Nations tribunal settled the maritime border dispute in 2007, awarding Guyana nearly double the territory granted to Suriname.

The resolution also determined that the CGX site was more than six miles (10 kilometres) inside Guyana's territory, Sully said, but the company found a better location three miles (5 kilometres) south of the original site.

CGX explored more than 190 square miles (500 square kilometres) and expects to spend roughly US$70 million to drill a well 20,000 feet (6,000 metres) deep, Sully said.

Spanish-Argentine company Repsol YPF and Exxon Mobil Corp of Irving, Texas, also have concessions in Guyana's oil-and-gas-rich basin, which could contain up to 15 billion barrels of oil and 42 trillion cubic feet of gas reserves, according to the US Geological Survey.

Two years ago, CGX paid US$8.9 million - the majority of Guyana's legal bill - following the country's dispute with Suriname, though President Bharrat Jagdeo has said CGX would not receive preferential treatment.

- AP