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Wednesday, November 25, 2020

Staatsolie celebrates 40 years as Suriname braces for deepwater bonanza

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Staatsolie Maatschappij Suriname N.V., Suriname’s state oil company, is celebrating its 40th Anniversary in a year that has seen almost 70 years of oil exploration culminating with three major deepwater oil discoveries and the opening of the offshore potential of the South American country.

“Throughout our history we have achieved milestones because of the heart of our company: the people,” Staatsolie said in a recent comment.

Staatsolie was set up on December 13, 1980 to monitor the operations of Gulf Oil that had an agreement to execute petroleum operations offshore Suriname. In the year 2000, the strategic decision was taken to also develop the regulators role which saw the establishment of the division Petroleum Contracts.

“From that moment on Staatsolie achieved one milestone after the other,” the company said.

After a successful exploration and production test program, onshore commercial production in Suriname started on November 25, 1982 in the Tambaredjo oil field in Saramacca at a rate of 200 barrels a day.

Staatsolie then went on to set up production facilities and infrastructure and purchased its first oil tanker, after securing a loan from a consortium of local banks.

Fast forward to 2020 and the search for hydrocarbon in the highly prospective Guyana-Suriname basin hit pay with the discovery of the Maka Central-1 well announced in January 2020. This was followed by a second discovery at the Sapakara West-1 well in early April, then the largest oil strike to date at Kwaskwasi-1 in July.

All three discoveries have been made in Block 58. US multinational investment bank and financial services company Morgan Stanley said the block is estimated to contain a potential 6.5 billion barrels of oil equivalent resources.

“We forecast first oil occurs in 2026, with production from each successive phase commencing in one-year increments thereafter,” the bank said in a research paper seen by OilNOW.

Meanwhile, Norway-based Rystad Energy has said the three discoveries made to date are estimated to contain about 1.4 billion barrels of oil equivalent resources.

“With these three finds alone, the Government of Suriname will get an income anywhere between $20 and $60 billion dollars, and $20 billion is the lowest possible income if we develop all three of the finds that we have,” Rudolf Elias, CEO of Staatsolie said in a recent webinar.

He stressed that Suriname needs to be ready for the influx of big revenues when production commences in around five years.

“There should be a national consensus. How much of the earnings would be channeled to the Sovereign Wealth Fund? How much to be invested to develop different segments of the economy and society and how much to be used for consumption… [this must be determined],” he said.

Apache Corporation, operator at Block 58, has since selected its 5th exploration well as the search for more hydrocarbons continues.

Staatsolie will now be expected to play an even larger role as Suriname’s deepwater potential is unleashed in the coming years. The company is confident it is up to the task and expects to continue contributing to the country’s national development.

“We are a small company compared to others but we are the biggest local company and if you look at what was our contribution to government in the last 10 years it was almost 2 billion with respect to dividends and taxes that we pay,” said Marny Daal-Vogelland, Director of Staatsolie Hydrocarbon Institute, during a presentation at the recent One Basin Three Nations Oil and Gas webinar.

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