Suriname’s state oil company Staatsolie could use revenues from its participation in the US$12.2 billion Block 58 offshore oil development to help finance its expected stake in the upcoming Block 52 gas project, according to consultancy Wood Mackenzie.
Staatsolie has the right to take up to a 20% stake in offshore oil and gas projects under Suriname’s production sharing agreements. For Block 58, where TotalEnergies and APA Corporation have made a final investment decision (FID), the state company must contribute approximately US$2.4 billion in development costs, its Chief Executive Officer, Annand Jagesar told Reuters. Staatsolie, which lacks sufficient cash reserves to cover the full amount, told the publication it has turned to international lenders to raise the remaining US$1.5 billion needed by 2025.
Jagesar said Petronas, operator of Block 52, is also expected to make a final investment decision next year for a gas project in that block. If Staatsolie exercises its right to take part at 20%, it will need to secure around US$2 billion for that development, which Wood Mackenzie estimates could cost US$10 billion altogether, Reuters said.
While Staatsolie’s cash reserves are stretched, WoodMac is of the view that the state company’s financial outlook could improve just in time. At peak output, Staatsolie’s share of revenues from the Block 58 project is expected to reach US$700 million per year, WoodMac told Reuters. Crucially, most capital expenditures for Block 52 are expected between 2028 and 2031, meaning cash flow from Block 58 could become available in time to support Staatsolie’s stake in Block 52, WoodMac’s Principal Analyst, Upstream, Luiz Hayum, told Reuters.
Wood Mackenzie has said a gas project at Block 52 could start production as early as 2031. It sees Guyana and Suriname as being potentially instrumental in meeting a global liquefied natural gas (LNG) supply gap expected in the 2030s.
Meanwhile, the Block 58 GranMorgu project is expected to produce 220,000 barrels per day (b/d). A floating production, storage and offloading (FPSO) vessel is being built by SBM Offshore, in partnership with Technip Energies, while the subsea work is being handled by Saipem and TechnipFMC.
