Suriname is the smallest sovereign state in South America with a population of less than 600,000 people. The outlook for the country has improved substantially in recent months with major oil discoveries.
An industry analyst with experience in Suriname comments, “The lease rounds have been placed intelligently, banking the three successes of the Total and Apache led consortium within Block 58. Also, we expect a couple more drilling results to follow before the submission of these bids. The acreages offered are well within the area where the presence of petroleum system has already been proven and also consists of the results of the six near shore wells drilled by Staatsloie (Marai, Electric Ray, Kankantrie, Powisi, Gonini and Tukunari). These wells were drilled to depths between 1,000 and 3,000 meters in 8 to 25 metres of water.”
Since gaining independence from the Netherlands in 1975, Suriname’s weak democracy has suffered three coups. Two of them were led by the same person: Desiré Delano Bouterse, the controversial president of Suriname until July this year. In 2019, Bouterse was convicted of planning and ordering the extrajudicial execution of 15 political opponents and sentenced to 20 years in prison.
Despite this and stark economic challenges, Suriname has emerged from electoral turmoil with a new government eager to develop its hydrocarbon resources. Three major offshore discoveries have been made in 2020 by US independent, Apache, making Suriname the leading country for discovered oil and gas resources, behind Russia.
According to an analyst at Rystad Energy, “Breakeven on the Suriname discoveries is estimated at USD 45 per barrel, although this may fall as more resources are discovered and development gets closer.” Petronas, Total, Apache, Shell and Tullow Oil are all in various stage of drilling exploration wells.
“Breakeven on the Suriname discoveries is estimated at USD 45 per barrel, although this may fall as more resources are discovered and development gets closer.”
Analyst, Rystad Energy
On 30 November 2020, Staatsolie Hydrocarbon Institute (SHI) opened the virtual data rooms for the recently announced launch of a bidding round for 8 shallow water offshore blocks. Bids are due online by 30 April 2021 and given recent discoveries in Suriname and neighbouring Guyana, there are high hopes for the auction.
Revenues from the offshore discoveries made this year could transform the country’s economic prospects, if the estimated 450,000 barrels per day at peak are ever reached. It could also lead to the state oil company, Staatsolie, tapping the bond market and potentially listing its shares.
Suriname gets 95% of its power from hydroelectric generation and is not dependent on oil but the income could strength the country’s weakened economy. The CEO of Staatsolie has called for reforms to ensure future oil income is channeled into a sovereign wealth fund for the benefit of all.
“With this new government and these new discoveries Nicolás Maduro loses an ally and gains a competitor!”
Political analyst, Latin America
This could also result in a geopolitical change in the region. Suriname had maintained a close relationship with Venezuela while Desiré Delano Bouterse was in power. There are even rumours of drug trafficking relationships between the two countries – Bouterse himself was convicted in absentia in the Netherlands in 1999 and sentenced to 11 years’ imprisonment for trafficking 500kg of cocaine!
A Latin America political analyst summarises, “With this new government and these new discoveries Nicolás Maduro loses an ally and gains a competitor!”