Surinamese state oil company, Staatsolie, announced on March 4 that it has signed a Letter of Agreement (LoA) with PETRONAS and ExxonMobil to extend the exploration of a gas discovery made in 2020 off the coast of Suriname in Block 52.
The partners are now considering the potential for a floating liquefied natural gas (FLNG) project.
The Sloanea-1 exploration well in Block 52 led to a gas discovery in 2020, initially deemed commercially unattractive. However, after intensive discussions, Staatsolie, PETRONAS, and ExxonMobil have signed the LoA, outlining broad agreements, principles, and conditions to further investigate and increase the feasibility of developing a commercial gas field in Block 52.
Staatsolie said an essential aspect of the feasibility is a guaranteed tax-free period of ten years from the start of production, a provision not uncommon in offshore gas projects globally to enhance economic viability.
This tax exemption has received government approval.
The LoA will form the basis for negotiating a ‘Gas Addendum’ to the production sharing contract (PSC) for Block 52, signed in April 2013. The Gas Addendum will establish procedures and conditions for assessing, developing, and producing the gas discovery. Due to the potential year-long duration of negotiations, the agreements reached so far are recorded in the LoA.
The signatories to the LoA include Datuk Adif Zulkifli, Executive Vice President and Chief Executive Officer of Upstream of PETRONAS; Paul Riley, Branch Manager of ExxonMobil Exploration and Production Suriname, and Annand Jagesar, Managing Director of Staatsolie.
PETRONAS expressed excitement about achieving this milestone and plans to drill the Sloanea-2 appraisal well from April 2024, including a production test.
The results of the Sloanea-2 well will determine the feasibility of a commercial gas field, with potential gas production earliest by 2031. In the event of a viable gas field, the partners intend to develop it through a FLNG project.
FLNG involves extracting gas from a floating production platform, liquefying it, and storing it for transport in gas tankers.
The Sloanea-1 exploration well encountered several hydrocarbon-bearing sandstone packages with good reservoir qualities in the Campanian section. PETRONAS drilled the well to a total depth of approximately 15,682 feet (4,780 meters) using the Maersk Developer rig.
PETRONAS is currently drilling the Fusaea-1 well in the same block.
Block 52, covering an area of 4,749 square kilometers, is strategically located north of the coast of Paramaribo, Suriname’s capital city, in the promising Guyana-Suriname basin. Petronas Suriname E&P, as the block’s operator, has a 50% participating interest and ExxonMobil Exploration and Production Suriname B.V. holds the remaining 50%.
