The tale of the milkmaid comes to life in Suriname. Although oil extraction has not yet begun from the impressive crude oil deposit, which promises to revolutionize the economy of this small country, but The government has already started spending it and making plans with this revenue. It is an “evil” that afflicts many countries that become wealthy nations overnight (at least in theory) thanks to the discovery of great resources such as oil. It is still too early to draw conclusions, but early indications appear that Suriname will not be as careful as its neighbor Guyana, which is using oil money to build a sovereign wealth fund and finance infrastructure, hospitals, schools, etc. This is Suriname’s plan before it starts extracting its oil.
The President of Suriname, Chandrikapersad Santokhi, announced on Monday that every citizen of the country would receive a portion of royalties from the energy sector, for a value of 750 dollars and with an interest of 7% per year. “Today I can announce the creation of a financial instrument that offers the people of Suriname a share of future oil royalties. In this way, our people become de facto owners of Suriname’s natural assets,” Santokhi said in a statement. press release.
The Suriname oil field
Little by little, this former colony of the Netherlands begins to appear in the reports of investment banks and international organizations for its untapped hydrocarbon resources, but especially the one called Block 58, a very oil-rich area that triggered the economy of the country. expectations. The International Energy Agency mentioned the country up to eight times in its latest report on medium-term crude oil forecasts. The IEA highlights the potential of this small country and examines the field which was the largest oil discovery in Suriname a few years ago.discoveries that had not materialized due to bureaucratic problems and fluctuations in the price of crude oil, which mean that projects that seemed profitable cease to be overnight. Today, Suriname produces only 10,000 barrels of crude oil per day, but investments in this area could increase production by 20 times.
The most promising block for Suriname’s first marine barrels lies directly east of Guyana. Block 58 is a plot jointly owned by TotalEnergies and APA Corporation and finally obtained permission on October 1st. FID (final investment decision), which led Suriname to launch “flying campaigns”. Once the FID is approved, it is only a matter of time before oil starts gushing from Suriname’s seabed through the use of a giant floating platform (half platform, half ship , called FPSO or Floating, Production, Storage and Offloading) like these. used by Guyana to extract its crude oil. “It is expected that oil can be extracted approximately five years after the FID, with an FPSO designed to produce between 180 and 200,000 barrels per day,” the IEA says. This will increase Suriname’s production 20-fold within a few years. With this data, the government of the small country has already started promising “spending” and checks to its citizens.
Oil and royalties for all
Under the name “Royalties for all” (RVI), this financial instrument comes shortly after the French group TotalEnergies announced an investment of one million dollars to develop an oil project located in block 58, in the waters of Suriname , where important crude oils are found. oil reserves.
Santokhi explained that citizens will receive a savings bond worth $750 and that royalty payments will be made “in the future” once the oil from Block 58 has been sold. “The RVI is quoted in US dollars, so its value is stable, payment will be made in Surinamese dollars. For people over 60 years old and people with disabilities, options are being developed to receive them before 2028” , he added.
Last October, TotalEnergies announces a total investment of $10.5 billion in the GranMorgu Block 58 projectof which it will be the operator and where it is associated with the American company APA Corporation.
Actual exploitation will not begin until 2028
The wells of the project, which was the subject of a prospecting campaign completed in 2023, are located 150 kilometers offshore Suriname and exploitation should start in 2028.
To enter production, a floating unit with a processing capacity of 220,000 barrels per day will be used, knowing that its total reserves have been estimated at more than 750 million barrels.
The Constitution of Suriname states that “Natural resources are the property of the nation and will be used to promote economic, social and cultural development.” In this sense, Santokhi said that the RVI is “a form of reward for several years of efforts necessary for macroeconomic and financial stabilization.”
The Santokhi administration inherited, when it came to power in 2020, an unsustainable public debt burden, which reaches 148% of gross domestic product (GDP)compared to 41% in 2015. To reduce the debt, the government embarked on an ambitious reform program, which involved social cuts, and implemented a program supported by the International Monetary Fund (IMF).
