Wednesday, November 30, 2022

Six offshore Suriname blocks to go on auction on Nov. 28 – Staatsolie

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Staatsolie Hydrocarbon Institute (SHI), a wholly owned subsidiary of Staatsolie Maatschappij Suriname N.V., has announced the launch of a competitive bid round of six new blocks in the Demerara acreage of Suriname.

It said the blocks are located east to the current offshore discoveries, in a sparsely explored area, and have a water depth varying from 400 to 3500 metres.

Minimum work programs have been prescribed for each block, with 25% relinquishment expected at the end of each phase.

For Blocks 63, 64 and 65, the license holder will have an initial exploration phase of three years, during which it will conduct technical studies. In the period, the license holder may opt to acquire and process 3D seismic or drill one exploration well. In the second and third exploration phases, two years each, the license holder must drill one exploration well.

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For Blocks 66, 67 and 68, the minimum work program is alike, except that the license holder may not opt to forego the acquisition and processing of 3D seismic for the drilling of an exploration well in the first exploration period. The former is required. The latter is not. The second exploration phase, for these blocks, lasts three years, instead of two.

Interested parties may offer additional work program elements, such as additional seismic, exploration well commitments and a signature bonus.

Qualified companies are free to form consortia, but minimum stakes are set at 10% for any individual company and 40% for the Operator.

Staatsolie will retain up to 20% carried equity through the exploration period (which includes any appraisal), and in the event of a commercial discovery, the right to participate as an equity partner through the development and production phase.

The model PSC includes a fixed royalty of 6.25%, income tax of 36%, a cost recovery ceiling of 80%, and a profit split that varies from 30% to 50%.

A data room has been established for the auction, with extensive data available over the ~43,000 km2 area of the Demerara Bid round acreage, subdivided into subsets of the data related to the different blocks.

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The data room containing data and information on the open acreage opens on November 28, 2022 and will close to new bidders on April 28, 2023, with bids to be submitted by May 31, 2023. The winners will be notified of their awards on June 30, 2023. And the Production Sharing Contracts will be signed in the third quarter of 2023.

The bid round is being managed by Envoi Limited, on behalf of Staatsolie.

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