UPDATE 2-UN favors Guyana in oil border spat with Suriname

(Recasts with presidents, ruling details, shares, background)

By Ank Kuipers and Sharief Khan

PARAMARIBO, Suriname/GEORGETOWN, Guyana, Sept 20 (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 OYLu.V, 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.