TotalEnergies Eyes 2028 for First Oil From $9-Billion Project Offshore Suriname
Suriname's wait to become a significant oil producer may be nearing an end as the French supermajor begins early development studies.
Suriname, a nation of about 600,000 people, appears to be a few short years away from becoming the next center of offshore oil and gas activity in South America.
This prospect grew brighter today as TotalEnergies announced it is considering a $9-billion project in the South American nation’s offshore Block 58 that would aim to produce 200,000 B/D of crude oil at peak.
The company said initial study work has begun, with more in-depth front-end engineering work slated to begin by the end of the year. A final investment decision is expected at the end of 2024 and, assuming the project goes forward, the company said it will aim to achieve first oil production by 2028.
TotalEnergies operates Block 58 with a 50% stake, while APA Corp., previously known as Apache Corp., holds the other 50%.
The significance of the announcement was underlined by a personal visit by the CEO of TotalEnergies, Patrick Pouyanné, to Suriname’s capital Paramaribo. There the chief of the French supermajor met with Chandrikapersad Santokhi, president of Suriname, and Annand Jagesar, CEO of state-owned oil company Staatsolie, which is tasked with providing local content elements to the project.
Pouyanné emphasized that the studies initiated today signify “a major step” for Suriname’s oil and gas sector. As per Staatsolie's data, the country produced merely 17,500 B/D of heavy oil from onshore fields in 2022.
“This development is in line with TotalEnergies’ strategy aiming at the development of low-cost, low-emissions oil resources, and leverages on our company’s expertise in deepwater projects. We will thus contribute to improving the well-being of the people of Suriname”, Pouyanné said in a statement.
The offshore megaproject will target two of the block's five oil discoveries made so far—Sapakara South and Krabdagu—which TotalEnergies and its partner believe hold a combined resource of nearly 700 million bbl. The two fields are located about 150 km offshore Suriname in depths ranging from 100 to 1000 m.
TotalEnergies said the fields will be developed using floating production, storage, and offloading units (FPSOs) that will be designed to reinject produced gas into the reservoir instead of flaring it.
Hopes for the 1.4-million-acre Block 58 have been underpinned in no small part by the fact that it lies alongside the maritime border of Guyana and its massive Stabroek Block where ExxonMobil has made more than two dozen major oil discoveries and currently produces around 380,000 B/D from a pair of FPSOs.
Yet, the certainty of Suriname replicating Guyana's success became questionable after APA and TotalEnergies encountered a series of setbacks during their exploration of Block 58.
Obstacles included higher-than-expected gas volumes during early well tests along with what the CEO of TotalEnergies said in 2022 was “a lack of confidence in understanding the reservoirs discovered to date” due to a “mismatch” between seismic data and actual well results. These issues pushed TotalEnergies to hold off on development plans for Block 58 for the past year.
Other potential deepwater developments offshore Suriname include Block 42 where partners Shell, Chevron, and Hess have drilled one exploration well.
APA, Indonesia’s Petronas, and Madrid-based Compañía Española de Petróleos have also drilled a successful discovery well in Block 53. Petronas and ExxonMobil have also discovered hydrocarbons in Block 52 and are expected to continue exploring the area.