TotalEnergies to study $9bn energy project in Suriname

French energy giant TotalEnergies has unveiled plans to commence studies for a substantial $9 billion oil and gas project in what is deemed Suriname’s most promising offshore region. This ambitious announcement was made during the visit of TotalEnergies CEO Patrick Pouyanne to the South American nation.

Suriname’s burgeoning oil potential is closely monitored, especially since some of its offshore fields share boundaries with the Stabroek block in neighbouring Guyana, where a consortium led by Exxon Mobil has unearthed a colossal 11 billion barrels of oil. TotalEnergies’ Block 58 is poised to potentially emerge as Suriname’s inaugural commercial offshore project.

During his visit, CEO Patrick Pouyanne engaged in discussions with Suriname President Chan Santokhi and the head of the state oil company Staatsolie, underlining the strategic importance of the project.

TotalEnergies, in partnership with U.S. firm APA, is projected to reach a final investment decision for Block 58 by the conclusion of 2024, following substantial investments of approximately $1.3 billion in exploration. This decision represents a pivotal milestone in the approval process for large-scale energy projects, marking the green light for development.

If the development plan secures approval, Staatsolie possesses participation rights of up to 20%, thereby underscoring its significant stake in the project’s success.

CEO Patrick Pouyanne expressed the significance of the moment, stating, “Block 58 development studies that we are launching today are a major step towards the development of the petroleum resources of Suriname.” Pouyanne also conveyed his optimism about the project’s cost-effectiveness, with production costs projected to be less than $20 per barrel.

Annand Jagesar, CEO of Staatsolie, echoed the historic nature of this development for the country. He projected that Suriname could potentially generate between $16 billion and $26 billion in revenue. Jagesar emphasised the importance of prudent policies to ensure that the oil wealth is reinvested in boosting the non-oil sector, rather than artificially inflating the economy, a scenario that has unfolded in countries like Venezuela and Nigeria.

Following this year’s well appraisal drilling, TotalEnergies has confirmed cumulative resources of nearly 700 million barrels of oil and gas in Block 58’s primary fields. These discoveries pave the way for the production of up to 200,000 barrels per day, primarily consisting of crude oil. Initially, associated natural gas will be re-injected to maintain crude output, with the potential for export in subsequent project phases, as outlined by Pouyanne.

The project envisages development through a network of underwater wells connected to a floating production, storage, and offloading unit situated 150 kilometres (93 miles) from Suriname’s coastline. Detailed engineering studies are slated to commence by the end of 2023, culminating in a final investment decision by the conclusion of 2024. The target is to achieve initial production by 2028, according to a statement released by TotalEnergies.