Staatsolie ready to support oil fund for Suriname as Block 58 development plans underway

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Suriname’s state oil company Staatsolie is preparing itself to prudently manage the country’s billion-dollar offshore oil industry. Staatsolie’s Managing Director, Annand Jagesar said the company is already eyeing a crucial step to realizing this goal; the establishment of a sovereign wealth and stabilization fund (SWSF). 

“Staatsolie is fully committed to contributing to a solid SWSF,” Jagesar is quoted as saying in Staatsolie’s 2023 annual report. Jagesar added that Staatsolie has played a key role in a government-coordinated committee for this purpose.

Suriname has a trove of SWSF templates to learn from. There is Norway’s blueprint – the Government Pension Fund Global. It was established after Norway discovered oil in the North Sea. The fund was set up to shield the economy from ups and downs in oil revenue. There is Guyana’s Natural Resource Fund. It was established in 2021. The fund closed the first quarter of 2024 with US$2.36 billion (approximately GY$492 billion), according to a March report from the Bank of Guyana.

Suriname’s first oil development is being led by TotalEnergies. It carries an estimated development cost of US$9 billion. A final investment decision is expected later this year. 

Staatsolie can participate in the development with up to a 20% stake. It plans to go this route. However, from royalties, profit oil and taxes, Staatsolie estimates government revenues from the Block 58 development will amount to between US$16 billion and US$26 billion over the anticipated two-decade lifespan of the production field, depending on the price of oil.

The project targets the Sapakara South and Krabdagu fields, estimated to hold around 700 million barrels of oil combined. The oil fields are situated in water depths ranging from 100 to 1,000 meters.

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