Suriname’s oil dream

Total's investment sparks economic transformation.

In a significant stride towards transforming its economy, Suriname, one of the world’s few carbon-negative countries, is on the brink of a groundbreaking offshore oil and gas venture. TotalEnergies’s CEO, Patrick Pouyanné, recently announced engineering studies for a potential USD 9 billion project, representing Suriname’s inaugural commercial offshore endeavour. This move, following a USD 1.3 billion investment in exploration, heralds a pivotal moment for Suriname’s resource development.

The state-owned firm, Staatsolie, revealed that 2024 is the slated year for Total’s final investment decision (“FID”), delayed from 2022, envisioning production commencing in 2028. “The CEO’s trip to Suriname this time was, in fact, to confirm that Total has made an FID and that they will be producing in Suriname.” The logistics consultant continued, “that’s the big boom everybody eagerly awaits because Total would be the equivalent of Exxon in Guyana, producing, exploration and developmental drilling.”

The endeavour, rooted in Block 58, where substantial potential has been unearthed, holds the promise of not only economic transformation but also job creation and infrastructure upgrades for Suriname. An energy sector HSE expert reported, “the government will be able to earn 50% of our earnings, and the other 50% will be a share between Staatsolie as the Surinamese Oil Company and Total.”

“The CEO’s trip to Suriname this time was, in fact, to confirm that Total has made a Final Investment Decision.”

Logistics consultant, Suriname

Inspired by Guyana’s remarkable success in its Stabroek Block, where ExxonMobil has discovered over 11 billion barrels of oil equivalent since 2015, Suriname aims to replicate this achievement. If realised, the project could yield a daily production of 200,000 barrels of crude oil. However, “Total is playing this game with Staatsolie.” A senior oil and gas engineer stated, “The oil is cheaper in Guyana; it’s from the same basin. The big oil companies like Total and Exxon have deals, so if I can get oil cheaper in Guyana, I will pump till it’s done.” Total is projecting Suriname production costs to be below USD 20 a barrel, potentially translating into a significant windfall for Suriname’s treasury, ranging from USD 16-26 billion from the estimated 800 million barrel deposit.

Challenges lie ahead and “one of the major issues with Suriname is the financial institution or the financial system,” replied a logistics consultant. “It’s difficult for people to create accounts, and they also have an issue with the US regarding the financial system,” which hinders smooth financial transactions, crucial for economic progress. Additionally, the country lacks the technical infrastructure to sustain offshore operations effectively. “From a technical point of view, we do not yet have the capacity to fulfil,” commented the energy expert, “which is one of the barriers.”

Another barrier is that Suriname might not be fully prepared to handle the demands of a booming oil and gas industry. “We have a long way to go to build the whole infrastructure to sustain and support the offshore business.” The energy expert continued, “From the housing side and transport side, that is also another part that needs serious discussion within the government and the commercial contractors that will be part of this movement.” The delay in Total’s FID and uncertainties surrounding gas exploration further complicate the situation. While the prospects are promising, Suriname must address these challenges to fully capitalise on its oil wealth and ensure long-term economic stability.

“We have a long way to go to build the whole infrastructure to sustain and support the offshore business.”

Energy expert, Suriname

Suriname’s unique status as a carbon-negative nation further underscores the significance of this venture. Being one of only three such countries globally (alongside Bhutan and Panama), Suriname has the opportunity to cement its role as a responsible energy exporter, leapfrogging its way out of poverty. This means “Suriname will now become one of the top three producing countries in the Caribbean.” The logistics consultant expanded, “Suriname is going to experience major economic growth with this development. It’s going to change the economic landscape in Suriname completely.”

Suriname’s journey into the oil and gas industry marks a turning point for the nation. The venture necessitates substantial infrastructural enhancements, promising a plethora of employment opportunities. The senior oil and gas engineer explained that “accommodation, logistics, food and beverage etc. will be needed to support Total. Transportation will be needed.” He also pointed out that “the spinoff will be big but not as big as people think because, in the region, Guyana has more experience right now and Trinidad as well.” As Total moves closer to the final investment decision, the prospect of Suriname becoming a key player in the global energy market looms large. Still “we, as Surinamese, are hoping to have our share, but that will not be much,” expressed the senior gas engineer, but “that’s my opinion.”

“the spinoff will be big but not as big as people think because, in the region, Guyana has more experience right now and Trinidad as well.”

Senior oil and gas engineer, Suriname

As Suriname stands on the precipice of this transformative venture, the world watches with anticipation. Total’s investment signals a new era, one where Suriname emerges as a major player in the global energy landscape, all while trying to preserve its ecological heritage and uplifting its populace.

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