Major investment in Surinamese oil field expected as TotalEnergies prepares to announce decision

amsterdam - The Surinamese oil field in Block 58 is estimated to hold around 700 million barrels of oil, with potential to produce 200,000 barrels per day. TotalEnergies is expected to make a $10 billion investment decision during a visit to Suriname.

Director Annand Jagesar of Staatsolie revealed that the Surinamese government will receive 60-70% of the oil revenues from new projects, with the rest going to companies, according to Reuters. TotalEnergies CEO Patrick Pouyanné announced plans for the Surinamese oil field, indicating an increase in estimated investment costs to $10 billion, up from $9 billion. The oil field in Block 58, located approximately 150 kilometers off the coast of Paramaribo, is set to be a significant offshore production project alongside existing onshore extraction.

American oil companies operating in neighboring Guyana's offshore areas have already seen success, contributing to a 38% annual economic growth in the country. TotalEnergies, a French energy giant with $210 billion in revenue, has started the project in Block 58 in collaboration with APA (Apache), which is also managing Block 53 for oil extraction.

TotalEnergies discovered oil in three wells in the region last year, estimating that the areas of Sapakara South and Krabdagu have a potential of 700 million barrels of oil, with a daily production capacity of 220,000 barrels. In comparison, Suriname currently produces approximately 16,000 barrels per day onshore. The production-sharing agreement stipulates that the Surinamese government will receive a significant portion of the oil revenue.

The offshore production area is attractive due to the ability to extract oil at depths of up to a thousand meters, less than the typical drilling depth for oil producers. The oil reserves will be connected to a Floating Production, Storage, and Offloading (FPSO) platform. TotalEnergies stated that the offshore processing through FPSO will be largely electric and gas flaring-free.

The first oil extraction in Block 58 is expected in 2028 following the necessary preparations. Staatsolie has expressed the likelihood of investing capital to secure a 20% stake in the project. Additionally, future oil extraction in Block 52, managed by Petronas and Exxon Mobil, is probable after the success in Block 58. Petronas, operating in an adjacent 4750 square-meter field, has identified multiple oil and gas reserves.

Research firms estimate a potential investment of $31 billion in offshore oil projects. Wood Mackenzie reported a higher-than-anticipated oil reserve of 2.4 billion barrels in Suriname. Foreign companies have encouraged Suriname, with its 700,000 inhabitants, to boost exploration efforts. Petronas' country head in Suriname hinted at tax incentives to encourage investment.

Recent collaboration between Staatsolie and Brazilian state oil company Petrobras aims to expand oil and gas exploration and reduce CO2 emissions. Staatsolie highlighted Petrobras' expertise with over 1200 patents for deep-sea resource extraction. Plans are underway to auction off new Surinamese oil fields annually and offer all available parcels to companies, including Staatsolie itself.