Suriname. The other new kid on the block in South America oil landscape?

Aside from the latest new emerging player in the oil landscape in South America with tremendous potential and already producing an average of 350.000 barrels of oil such as Guyana, there’s the other even smaller country that has the potential to become a new player in the region which shares a common basin such as Surinam, although in earlier stages of production and with much more work to do to reach an important level of production such as that of Guyana but which is already drawing important international oil companies due to its significant potential.

And this is because Suriname in its iconic offshore Block 58 based on different estimates by the US Geological Survey holds over 6 billions of barrels of reserves which has attracted companies such as Total Energies, Apache ($APA) CHEVRON ($CVX) although some decisions have been delayed by a consortium between Apache and Total Energies after having made 5 discoveries back in 2020 but still to make the final investment decision which was due to 2022 but still not being announced while the first find of oil was carried out in January 2020 by Apache by the Maka Central-1 well in Block 58, which struck 240 feet (73 meters) of oil pay and 164 feet (50 meters) of light oil and gas condensate pay, which according to Apache, at the time, confirmed the geological modeling of the block.

Also its important to underscore the fact that, unlike Guyana and its massive oil bonanza still is on the way to develop and build a solid national oil company and entities to channel and manage the resources out of the oil inflows, Suriname has its very own oil company called STAATSOLIE since 1980 and which has anticipated that the country could hold around 30 billions of barrels of oil offshore which could mean a tremendous boost for the small and impoverished economy of this former dutch colony and definitely change the geopolitical dynamics of the region as it would boost and change the oil flows and players in the current tightness of global oil markets.

Also its important to add the good and high quality of the oil discovered in Suriname, where just like the oil produced in Guyana, is medium to light sweet crude oil and condensates with API gravities of 34 degrees to 60 degrees and low sulfur content making it highly attractive to refiners and with relative low break even costs compared to the rest of the oil qualities of the traditional producers such as Colombia, Brazil, Ecuador or Venezuela which are heavy or extra-heavy oil and with higher break-evens, adding a premium to both Suriname and Guyana in terms of their crude oil qualities and the demand they will get in the medium and long term.

Therefore, the government of Suriname and STAATSOLIE have been recently announcing over 6 new offshore blocks in a new bidding round in order to further attract new investments as it still is finding some technical hurdles and discrepancies in seismic data by Total Energies and Apache prompting delays in decision to make a final investments in a country needed for inflow of resources and money which produces around 16.500 barrels per day only but which with a strong potential for ramping up production and with important players decided to pour their money due to the quality of oil discovered.

In this sense and considering the current global oil markets and especially for the Caribbean hub and also for a country such as Suriname this could definitely be a game changer after Trinidad Tobago called for the creation of a Caribbean Energy Alliance as countries such as Colombia face hurdles with its president Petro calling for the stopping of new oil exploration, Venezuela still stuck in its oil production despite some relaxation of sanctions by Washington, Mexico with same operational and technical problems impacting its oil sector just to name a few will make Suriname along with Guyana the newest and most attractive hubs for new oil production and with a strong importance also for the United States due to its close geographic  proximity.

Jose Chalhoub
Jose Chalhoub
Political risks and oil analyst with experience in Venezuela oil industry focused on intersection of geopolitical risks and oil markets.