December 18, 2023 [Offshore energy]- Four oil and gas giants – Shell, TotalEnergies, QatarEnergy, and Petronas – have inked production sharing contracts (PSCs) with Staatsolie for blocks offshore Suriname, enlarging their presence in the country’s offshore oil and gas industry.
These PSCs have been signed for blocks 63, 64, and 65, which were part of the Demerara Bid Round held from November 2022 to May 2023. The contracts from the bids were signed after negotiations with selected partners. The Demerara Bid Round was part of Staatsolie’s strategy to sign PSCs for as many offshore areas as possible.
A PSC for a 5,425 sq km Block 63 was signed with Petronas while the PSC for Block 64 was inked with TotalEnergies (40% interest), QatarEnergy (30%), and Petronas (30%), as these three players submitted a joint bid with TotalEnergies as the operator. Block 64 is a large 6,262 km2 block located about 250 km from shore.
Kevin McLachlan, Senior Vice President of Exploration of TotalEnergies, commented: “TotalEnergies is delighted to expand further its presence in offshore Suriname, together with two strategic partners. This new block fits well with our strategy to focus our exploration activity in exploring for material low-cost and low-emission resources in core areas for the company.”
On the other hand, BG International, a subsidiary of Shell, and QatarEnergy made a joint bid for Block 65. As QatarEnergy has a 40% participation interest and Shell holds a 60% interest, the UK oil major will act as the operator.
Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs, President and CEO of QatarEnergy, remarked: “We are delighted to sign the production sharing contracts for blocks 64 and 65, which will increase our working footprint in the promising basins of Suriname.
“We are also pleased to work with TotalEnergies, Petronas, and Shell in these blocks, and we look forward to achieving good results for the benefit of all parties involved. I would like to take this opportunity to thank the Surinamese authorities and Staatsolie for their commitment and support that resulted in the signing of these agreements.”
The PSCs, which are valid for 30 years, were signed by Staatsolie’s General Manager, Annand Jagesar, and the representatives of BG International and QatarEnergy, Mark Regis and Ali Abdulla Al-Mana, respectively, for Block 65. When it comes to Block 63, Zamri Baseri from Petronas inked the PSC.
For Block 64, the representatives of TotalEnergies, QatarEnergy, and Petronas – Artur Nunes Da Silva, Ali Abdulla Al-Mana, and Zamri Baseri – signed the PSC. The signing took place in the presence of the Minister of Natural Resources, David Abiamofo.
Mohd Redhani Abdul Rahman, Petronas’ Vice President of Exploration, stated: “Securing these blocks is crucial to Petronas’ effort in unlocking Suriname’s vast resource potential in the basin. This underscores the aspiration to build our presence in the country and strengthen our international portfolio, especially in the Americas.”
With these PSCs, Staatsolie extends the rights for exploration, development, and production to these companies, with the costs and risks during the exploration period fully covered by the latter. The exploration period consists of three phases and will last seven years. An exploration well will be drilled in both Block 64 and Block 65 in the first phase, which will last three years.
In Block 63, the first exploration well comes in the second phase of the exploration period. In the event of an oil or gas discovery that is declared commercial, Staatsolie has the right to participate in all three blocks with a maximum of 20% during the development period.
Located in the Demerara area in the central northern part of the Surinamese territorial waters, blocks 63, 64, and 65 are situated 160 to 355 kilometers offshore in water depths of between 150 and 3,000 meters. Staatsolie highlights that the industry’s confidence in the Suriname-Guyana basin has once again been confirmed with these PSCs in the fairly challenging deepwater area.
The company confirms that the Shallow Offshore 2 Bid Round is currently underway for eleven blocks in the shallow water area, the so-called shallow offshore. The area is located south of the deepwater oil and gas discoveries and north of Staatsolie’s production fields in the Saramacca district and has water depths of up to 150 meters. This tender round also fits in with the firm’s strategy to have as much area as possible under contract with international parties.
With the launch of development studies, TotalEnergies started laying the groundwork to make a final investment decision (FID) for a large oil project in Block 58 offshore Suriname by the end of 2024.
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