Finance-starved Suriname this week received the type of news it had been waiting for months when France-based Total Energies all but confirmed that actual production of oil in the CARICOM nation will begin in 2028.
The country had been waiting with baited breath as to whether the company would decide to go ahead and turn exploratory wells in its Block 58 offshore oil field into production systems in collaboration with US-based Apache Corporation (APA).
Top officials from Total including Chief Executive Patrick Pouyanné met President Chan Santokhi, other cabinet officials and state oil company officials in Paramaribo on Wednesday to announce that the consortium is targeting 2028 as the start up year for offshore oil production.
Suriname has since the 1980s been an onshore oil producer, dishing out about 16,000 barrels of oil daily. This would be its first commercial offshore project. A final and firm decision on the startup will be made by the end of next year but the executive has indicated that all roads are leading to actual production as three test wells have indicated that the block contains at least 700 million barrels, enough to justify production and to invest in a floating storage and offloading ship from which tankers will load and export production. Block 58 is right on the border line and down dip with Exxon’s prolific Stabroek Block in Guyana with nearly 35 large wells already drilled.
“The Block 58 development studies we are launching today are a major step towards the development of Suriname’s petroleum resources. This development is in line with TotalEnergies’ strategy aimed at developing low-cost, low-emission oil sources, and using our company’s expertise in deep water projects. We will contribute to improving the well-being of the Surinamese people,” said Pouyanné. Santokhi, facing reelection in two years amid a tanking economy, made no attempt to hide his elation at the news.
“Suriname is going through a challenging economic period. This announcement provides the much-needed prospects for positive developments for our nation. We are confident that the Surinamese people will benefit from the economic spin-off that will be generated in the next phases. Local entrepreneurs will have to seize the opportunities to offer their goods and services. We will ensure that future income from offshore oil and gas extraction is spent wisely,” he promised.
Suriname is set to earn way more than its neighbor to the west as it has negotiated better production sharing and other terms. The state will get 6.25 percent royalty compared to 2 percent in Guyana, will benefit from various taxes and the state oil company, Staatsolie, is a 20 percent equity partner with the firms. The bill proffered for the investment has been put at $9 billion and start-up production would be about 200,000 barrels a day, half of Guyana’s current tally since oil was brought up from the seabed back in 2019. Other oil producers in CARICOM are Barbados and Trinidad. The announcement came a day after Guyana opened bids for 14 additional oil blocks.