Staatsolie mulls entering Apache’s Suriname block

Block 58 offshore Suriname has again come under the spotlight since state-owned oil company Staatsolie announced it was considering farming into the block where Apache last week hit its third discovery.

According to an article by Reuters from Monday, Staatsolie acting general manager Agnes Moensi-Sokowikromo said in a press conference that the company rights to a stake of up to 20 per cent in the 1.4-million-acre Block 58, where Apache and Total last week made a “major oil discovery” at the Kwaskwasi-1 well.

The stake would cost the company between $1 – $1.5 billion to acquire since the total development costs are projected to be between $6 – $7 billion.

She added that, while the company is keen to participate, now may not be the best time to begin raising funds given recent downgrades to Suriname’s credit ratings.

“We have to make sure that the funding is in order and that we are ready, and for that, we need the state because we can’t do it alone”, Moensi-Sokowikromo stated.

The economy of the country crashed under former president Desi Bouterse who was replaced as president by Justice Minister Chan Santokhi who beat him in presidential elections in June.

Suriname’s oil hopes were first raised when ExxonMobil discovered huge amounts of oil in neighbouring Guyana, where crude production began in December 2019. So far, the U.S. supermajor has made 16 offshore oil discoveries there.

Optimism was further raised by several discoveries this year. The latest Kwaskwasi-1 well discovery is Apache’s third in Suriname this year. Namely, the first one was made at the Maka Central-1 well in January 2020 and the second one at the Sapakara West-1 well in early April.

Reuters also noted that the Surinamese government expected to receive between 60-70 per cent of total oil revenues once production began, which the state plans to deposit into a savings and stabilization fund.

“We have to make sure there are regulations that ensure the oil and the income from the oil will be used for sustainable development”, Santokhi stated.