Suriname draws oil drillers as new government looms

The potential new government has said it will encourage oil developments, as it seeks to emulate its neighbour Guyana, writes Canute James

Suriname is edging closer to a change of government that could pave the way for expanded offshore oil exploration.

The country hopes to emulate neighbouring Guyana, where ExxonMobil started oil production from the deepwater Stabroek block in December. Offshore Guyana forms part of the Guiana shield formation that runs from eastern Venezuela across Guyana and Suriname and to French Guiana. The US Geological Survey, an agency of the US government, estimates that the region may contain 13.6bn bl of oil, 21.2 trillion ft³ (600bn m³) of natural gas and 574mn bl of natural gas liquids.

Suriname's output is limited to 16,300 b/d from the onshore Tambaredjo and Calcutta fields, run by state-owned Staatsolie. In recent years, the firm has signed production-sharing deals with foreign companies for offshore acreage. ExxonMobil deepened its presence in Suriname last month by acquiring 50pc in shallow-water block 52 from Malaysian state-owned operator Petronas. The major already has a contract with Staatsolie at deepwater block 59, which borders Guyanese waters.

ExxonMobil's latest farm-in deal follows an oil discovery in April by US independent Apache at offshore block 58, which it operates with a 50pc stake while Total holds the other 50pc. Other companies with Suriname offshore acreage include Chevron, Japan's Inpex, London-listed Tullow Oil, US firms Kosmos and Murphy Oil, Spain's Cepsa and Germany's RWE. Suriname has 92.5mn bl of proven reserves and 17.1mn bl of probable reserves, according to Staatsolie.

Preliminary results from 25 May parliamentary elections gave 20 seats to the main opposition Progressive Reform Party (VHP), which has created a coalition with three smaller parties to control 33 seats — one short of the two-thirds majority needed to select a president to replace Desi Bouterse. Bouterse's National Democratic Party won 16 seats. The VHP has pledged to encourage oil development as part of a "reconstruction" of the country's natural resources.