Guyana and Suriname

Suriname’s ‘experience’ to help underpin hydrocarbons build-out

Bnamericas Published: Thursday, December 01, 2022
Suriname’s ‘experience’ to help underpin hydrocarbons build-out

Suriname’s hydrocarbons knowledge will further help develop the country’s oil and gas sector, according to Theodore Kahn, associate director at Control Risks' global risk analysis practice.

“The regulatory environment benefits from the country’s decades of experience as a small oil producer with an established regulatory framework and a well-regarded national oil company in Staatsolie,” the analyst told BNamericas amid the launch of Suriname’s offshore round.

Also read At a Glance: The strategic roadmap of Suriname’s Staatsolie

“This was not the case in Guyana, where the government has had to set up a regulatory and institutional framework nearly from scratch,” said Kahn, who monitors the Guyana and Suriname basin along with other regional countries.

And although the expert sees Suriname is well positioned to follow Guyana’s path, he did highlight that the former nation is not free from political risk due to a weak government and recent protests.

For the World Bank, “Suriname was heavily impacted by the pandemic, worsening the existing domestic vulnerabilities … significant pressures were put on government revenues and expenditures, in addition to the fiscal imbalances the economy was experiencing prior to the pandemic.”

During a past press briefing, the IMF’s communications department director Gerry Rice said, “the government, the country [Suriname] is facing a very difficult economic and political situation … we are very cognizant of the burden on the population from high food and energy prices.”

Kahn also highlighted unexpected delays in a final investment decision (FID) for offshore block 58, which would be Suriname’s first deepwater contributor of oil and gas.

On Monday, APA reported that the Awari exploration well, which targeted a prospect in the untested northwest portion of the block, was noncommercial.

When asked about the impact of the energy transition, Kahn believes this will shape companies' views of Suriname’s prospects. “There are reports that such concerns have played into the delay in an FID on block 58,” he added.

“But energy transition concerns should not close the window entirely on Suriname’s prospects. First, as in the case of Guyana, it is likely to be a relatively low-carbon intensity production site. In addition, the country’s small size works to its favor: when your population is around 600,000, you do not need to produce that much oil to have a major impact on public finances and development prospects,” according to the analyst.

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