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Thursday, November 26, 2020

Suriname expects to earn up to $60 billion from offshore discoveries – Rudolf Elias

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Suriname expects to potentially earn up to $60 billion from development of hydrocarbon resources at the three discoveries made to date offshore the South American country.

Rudolf Elias, CEO of Suriname’s National Oil Company, Staatsolie Maatschappij Suriname NV, during a webinar discussion – Guianas Green Economy Dialogue – on Wednesday pointed to the Maka Central-1, January 2020 discovery, the Sapakara West-1 discovery of early April and the Kwaskwasi-1 discovery of July, which were all made at Block 58. He said the Surinamese government expects to earn between $20 billion to $60 billion in revenue from just these discoveries.

US multinational investment bank and financial services company Morgan Stanley says its modelling of Block 58 shows that it contains a potential 6.5 billion barrels of oil equivalent resources which can be developed across seven phases with first oil targeted for 2026.

Meanwhile, Norway-based Rystad Energy said the three discoveries made at Block 58 are estimated to be 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,” Elias said, pointing out that the $60 billion is based on a $55 oil price.

Other exploratory drilling is currently underway on the block where the discoveries were made. Speaking to how Suriname has managed to secure oil deals that render these potential earnings, the Staatsolie boss said the country has a long history with hydrocarbons. “So, if you look at Suriname and the deals that we made with the oil companies, because we have a long history of oil with Staatsolie as the National Oil Company, we have very strong regulation of oil.”

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With such a large sum of money, Elias said the question now is how the country will spend these revenues to the benefit of the people. Noting that eventually their oil resources will be depleted, he said that the conversation on wise spending needs to be an inclusive and national one.

“I always say, let’s have a national discussion today with all the politicians– coalition and opposition–but also the business society and the unions…come together and say, ‘what will we do with the money that we will get five years from now?’ Let’s discuss it today because if we don’t discuss it today, by default we will not have anything yet to discuss and we will not have anything to spend it on and when we don’t have that, it is very easy to go the way that Venezuela went,” he stated.

He said that the Surinamese people need to be consulted on not just saving in a Sovereign Wealth Fund but the portion that will be consumed.

Suriname must begin discussion on coming oil money – Staatsolie CEO

“The behaviour of the people will be driven by the politicians in order to say ‘let’s have that national discussion of what we will do with the $20 to $60 billion that we will get in the coming 30 years,” he stated.

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