SURINAME’S quest for an oil boom has been reignited by France-based TotalEnergies announcing that it will begin development studies for a large oil project offshore the Caribbean nation before the end of this year. The study is being done ahead of a US$9-billion investment into Suriname’s nascent oil industry which is expected to start first production in 2028.

Patrick Pouyanné, CEO of TotalEnergies, made the announcement during a visit to Suriname Wednesday, lifting the uncertainty surrounding the final investment decision (FID) for offshore Block 58 which it operates in a 50-50 partnership with US oil and gas exploration company Apache Corporation. The FID is expected to be made in 2024. The decision is a crucial step in mega energy project to greenlight development. It was originally delayed from 2022 because of concerns over a mismatch between seismic data, and drilling results, with a number of dry wells drilled contrary to expectations and a high oil-to-gas ratio. That delay set back the original timeline for first oil production from 2025 to 2028. However analysts at oilprice.com believe first production for Suriname could come as early as 2026.

“The Block 58 development studies that we are launching today are a major step towards the development of the petroleum resources of Suriname. This development is in line with TotalEnergies’ strategy aiming at the development of low-cost, low-emissions oil resources, and leverages on our company’s expertise in deep water projects. We will thus contribute to improving the well-being of the people of Suriname,” Pouyanné said.

Block 58, which is set to become Suriname’s first commercial offshore project, has been confirmed to have cumulative resources of nearly 700 million barrels of oil and gas in two main fields – Sapakara South and Krabdagu.

“These reserves, located in water depths between 100 and 1,000 metres, will be produced through a system of subsea wells connected to a FPSO (Floating Production, Storage and Offloading unit) located 150 km off the Suriname coast, with an oil production capacity of 200,000 barrels per day,” TotalEnergies said in a release. Pouyanné said at the initial stage of production, the gas will be reinjected to maintain crude output and could be exported in the future.

“Suriname is going through a challenging economic period. This announcement provides the much-needed outlook towards positive developments for our nation,” Chandrikapersad Santokhi, president of the Republic of Suriname, said during the meeting which was also attended by Annand Jagesar, CEO of Staatsolie, Suriname’s national oil and gas company.

“We are confident that the Surinamese people will benefit from the economic spin-off that will be generated in the next phases. Local entrepreneurs will have to seize the opportunities to provide their services and goods. We will make sure that future income from the offshore oil and gas will be spent wisely. Those incomes will contribute to the prosperity and stability fund, and will be a means to diversify our economy by developing sustainable sectors such as agriculture and tourism,” Santokhi said of the project which offers a glimmer of hope to his embattled government in the capital Paramaribo.

Suriname is undergoing an economic crisis, which, despite harsh IMF-imposed economic reforms, is worsening. Inflation has soared into double digits, with reached a worrying 56.6 per cent in July 2023, and there are fears it will spiral higher. This is causing the cost of living in the country of 620,000 people to soar, straining already deeply impoverished households. That, in turn, is causing political dissent and fuelling violent anti-government protests. Those events see Paramaribo aggressively promoting the exploitation of Suriname’s vast petroleum potential with an offshore oil boom seen as an economic silver bullet by an increasingly fragile government.

“We have reached a historic moment in our country,” said Jagesar. The country could earn between US$16 billion and US$26 billion, he said, and “with good policy there can no longer be poverty in Suriname,” adding it needed to make sure that oil wealth would be re-invested to propel the non-oil sector, instead of artificially expanding the economy, as has happened in Venezuela and Nigeria.

The discoveries in Surinamese water are light and sweet crude which are highly demanded because they are easier and cheaper to refine into high-grade, low-emission fuels. TotalEnergies expects the project could be developed at a production cost of less than US$20 barrel, Pouyanné said. Brent crude, the global benchmark traded at US$91.88 per barrel Wednesday, while West Texas Intermediary traded at US$88.52 per barrel.

TotalEnergies added in the release that it “is committed to the authorities of Suriname to develop this project in a responsible manner, both by ensuring benefits in terms of job creation and economic activities for Suriname and by using the best available technologies to minimise greenhouse gas emission”, in a nod to the pressure facing energy companies to reduce their carbon emissions and for the decarbonising of the global economy.

“In particular, the facilities will be designed for zero flaring, with the associated gas entirely reinjected into the reservoirs. During the upcoming development and production phases, TotalEnergies will continue working closely with the national oil company Staatsolie to reinforce the actions in favour of local content. These actions have already allowed the training of more than 80 people for logistic base operations in Paramaribo during the exploration and appraisal phases,” it ended.