Suriname: projects to exploit the country’s oil resources have finally restarted
After many oil discoveries in the waters off Suriname since 2020, it was believed that the impoverished former Dutch colony, among the poorest countries in South America, would soon join neighboring Guyana in benefiting from an oil boom of global proportions. epic. By 2022, those hopes were dashed by the decision by TotalEnergies and APA Corporation to delay the long-awaited multi-billion dollar Final Investment Decision, or FID, for the 5600 sq km Block 58, where 5 structurable deposit discoveries had been made.
That has dashed Paramaribo's hopes of reviving a fragile economy hit by a severe fiscal crisis that is turning into civil dissent. Since January 2023, there have been signs that Suriname's long-awaited nascent oil boom is on track, notably with TotalEnergies CEO Patrick Pouyanne recently visiting the crisis-prone country to meet President Chan Santokhi.
APA and 50/50 partner TotalEnergies announced their first discovery in Block 58 offshore Suriname in early 2020, after the Maka Central-1 well struck 240 feet of oil and 164 feet of light oil and condensate of gas. That discovery was followed by four more discoveries in Block 58, the latest being the Krabdagu discovery in February 2022.
Since 2021, when TotalEnergies took over as operator of Block 58, there has been considerable success with appraisal drilling in those discoveries, with additional oil deposits being identified. Indeed, as early as 2020, US investment bank Morgan Stanley claimed that Block 58 contained at least 6.5 billion barrels of oil resources.
These developments sparked considerable optimism that TotalEnergies would proceed with an investment as early as 2022, with first oil expected as early as 2026, but this would not happen. A discrepancy between seismic data, drilling results and reservoir assessments, as well as a high gas-to-oil ratio, have raised concerns that exploitation of Block 58 may not be as profitable as initially believed
After those worrying events, good news emerged for Suriname with APA and TotalEnergies reporting a series of successful evaluative drilling and flow tests. From the analysis of these results it is estimated that there are exploitable oil resources of approximately 700 million barrels in the Sapakara and Krabdagu discoveries. In a somewhat surprising event, TotalEnergies CEO Patrick Pouyanne visited Suriname earlier this month, where he met with President Santokhi and executives of the national oil company Staatsolie to discuss the future of Block 58. At the time of announcement of his travel plans, Pouyanne, according to Reuters , was quoted as saying that (TotalEnergies had identified an oil field) “large enough to initiate considerable deepwater development.”
On September 13, 2023, the APA announced that development studies had been initiated for Block 58 with 700 million barrels of recoverable oil resources identified in the Sapakara and Krabdagu oil discoveries approximately 93 miles off the coast of Suriname. APA said it will be enough to support the operations of a floating production, storage and offloading (FPSO) vessel with a capacity of 200,000 barrels per day. The company reported that detailed engineering studies will begin by the end of 2023 and that the FID will be built by the end of 2024 with first production expected in 2028.
This sees Suriname finally embark on its long-awaited oil boom, reviving hopes that the former Dutch colony will become a major regional oil producer. It was initially predicted that Suriname would pump 650,000 barrels of oil per day by 2030, but with the FID postponed to 2024, that likely won't happen until at least 2032.
There are also discoveries outside Block 58 to consider, although work has not currently progressed beyond exploratory activities. These include the 2020 discovery of the Sloanea-1 exploratory well in Block 52 offshore Suriname by Malaysian national oil company Petronas, which has a 50% managed stake, and partner Exxon's 50%. There is also the Baja-1 discovery in Block 53 off Suriname, adjacent to Block 58, by APA, the operator which holds a 45% stake, Petronas with 30% and Cepsa which controls the remaining 25 %.
These discoveries are very important and not only for Suriname, a country which, being outside of OPEC, could provide oil resources not subject to the control of the cartel and therefore necessary at this time when OPEC is reducing production to keep prices high.
Thanks to our Telegram channel you can stay updated on the publication of new Economic Scenarios articles.
The article Suriname: projects for the exploitation of the country's oil resources are finally restarting comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/suriname-finalmente-ripartono-i-progetti-di-sfruttamento-delle-risorse-petrolifere-del-paese/ on Thu, 28 Sep 2023 07:00:38 +0000.