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Suriname asks for cooperation between Exxon and TotalEnergies in gas projects

Staatsolie and oil giants discuss cooperation for gas development

Suriname asks for cooperation between Exxon and TotalEnergies in gas projects

Staatsolie has entered into talks with oil giants Exxon Mobil and TotalEnergies to encourage joint development of natural gas fields that straddle the maritime borders of Suriname and Guyana, the state-owned oil company’s chief executive told Reuters. The early talks are part of Suriname’s efforts to increase foreign investment in its energy production and transform the South American country into a regional gas hub. Suriname’s first large-scale oil production from the sea is about four years away. On the western side of Suriname, an Exxon-led consortium in Guyana has rapidly ramped up oil production to about 650,000 barrels per day. The consortium is discussing with the government of Guyana the development of undeveloped gas fields. Guyana has stated that it wants the consortium to exploit the fields for domestic use and export, and generate a second stream of energy revenue for the country.

Exxon has planned six projects in Guyana, where it has confirmed more than 11 billion barrels of recoverable reserves, mainly for the production of more lucrative crude oil. A seventh project would be the first of the consortium to focus mainly on gas. Two of Exxon’s discoveries in Guyana, which consist mainly of natural gas and gas condensate, are near two Surinamese fields where TotalEnergies and APA Corp have found gas, Staatsolie managing director Annand Jagesar said in an interview at the CERAWeek energy conference in Houston.

Various data indicate that we may have more gas. We approached Total, but they don’t see a viable possibility at the moment to turn Maka and Kwaskwasi into a project. By bundling the Guyana and Suriname explorations, we can create that scale, Jagesar said.

Differences in taxes and other fiscal conditions between the two countries are also some of the challenges that need to be addressed before joint gas development can take place, he added.

Exxon and TotalEnergies spokespeople declined to comment.

Gas power

While Suriname’s first project scheduled to begin offshore exports โ€“ Block 58 from TotalEnergies and APA โ€“ will initially focus on oil, the country sees itself as a potential gas hub for the region. There is a golden lane, Jagesar said, referring to a belt of offshore oil and gas reserves that stretches from Brazil to Guyana and is known as the Equatorial Margin. The sweet place is in Guyana, which is the best reservoir… It looks like we have more gas, Jagesar said. TotalEnergies and APA aim to make a final investment decision on the development of Block 58 later this year, with the goal of first oil production by 2028. But the project’s planned $9 billion cost could rise as drilling costs have risen globally, Jagesar said. Two years ago, the cost of drilling was like $200,000 a day. Now it’s like $400,000, he added. The next project to inaugurate offshore exports could be Block 52, where Malaysian state oil company Petronas and partner Exxon plan to explore the area further. They have made arrangements to drill an appraisal well and conduct production tests, Jagesar said.

Petronas could pursue a liquefied natural gas (LNG) project using Suriname’s gas if discoveries allow. Petronas and Staatsolie have agreed to impose special tax conditions through a contract supplement that will give the company a tax-free period of ten years from the start of production. These negotiations can be extended to other companies, the director said. Major producers from neighboring countries such as Brazil’s Petrobras are looking at opportunities in Suriname, Joelson Mendes, the company’s head of exploration and production, said on Wednesday. In shallow waters, Suriname has signed production sharing contracts with companies such as the American oil company Chevron and QatarEnergy for 4 blocks. Following a recently launched new round of bidding, the total number of allocated blocks could increase to 21-22, Jagesar said.

Source: https://www.reuters.com/business/energy/ceraweek-suriname-presses-exxon-totalenergies-combine-gas-developments-2024-03-20/

Date: 20 March 2024

Categories:  Economic Boom, Economic Crisis, Economic News, Guyana EN, Manufacturing Sector, Offshore Exploration, Oil Discovery EN, Oil and Gas Industry, Suriname 

Tags:  Bidding round, Block 52, Block 58, Chevron, Energy, Exploration, Exxon Mobil, Guyana, Investment, LNG, Liquefied natural gas (LNG), Maritime borders, Oil production, Petrobras, Petronas, Production, QatarEnergy, Staatsolie Maatschappij Suriname NV, Suriname, Tax conditions, Taxation, TotalEnergies 

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