Norway-based Rystad Energy says the Net Present Value on projects on active blocks in Suriname will generate substantial cash flows as the South American country takes a giant leap forward with its game-changing discoveries.
“These assets, when developed, could boost Suriname’s economic fortunes and generate outstanding revenue for the government,” the consultancy group said. “We expect the Net Present Value of projects on Suriname’s 11 active blocks to be significant, with a potential to generate substantial cash flows for both state player Staatsolie and international oil companies, even in a low oil price environment.”
Recent exploratory success has put Suriname on the world oil map, with cumulative recoverable resources in the order of 1.9 billion barrels of oil equivalent as estimated by Rystad Energy. “For a perspective on the significance of these volumes, when considering a ranking of countries by total oil resources discovered since 2015, Suriname ranks fourth, only behind Mexico (3rd), United States (2nd) and Guyana (1st).”
Production sharing contracts (PSCs) allow Staatsolie to exercise participation rights of up to 20% when field development plans are approved, and the company has already indicated interest to farm in to Block 58.
“The country’s five discoveries so far are in the early stages of exploration. Short-term exploration/appraisal operations will help identify the play concept and pool limits as well as estimate the actual resource potential and decipher commerciality,” Rystad Energy said. “When commerciality is established, a one-year period will be triggered in which Staatsolie will have to conclude its participation procedure.”
The consultancy group says it expects production from Blocks 58 and 52 to commence by the end of this decade and grow to about 650,000 barrels per day by early 2030. Provided Staatsolie exercises its right to farm in to Block 58, for instance, it would cost initially between $1.5 to $2 billion and its partaking in future development phases could double, with CAPEX peaking in the years 2028 and 2031.
“The company plans to conduct an international roadshow to promote a financing project for its own participation,” Rystad Energy said.
Financing options include bank loans, private financing, and an initial public offering, which Staatsolie aims to pursue by developing close partnerships in South America, the Middle East and Asia.