Suriname Seeking Funds for Offshore Exploration

August 16, 2019

Tullow Oil earlier this week announced a large discovery offshore neighboring Guyana (Photo: Tullow Oil)
Tullow Oil earlier this week announced a large discovery offshore neighboring Guyana (Photo: Tullow Oil)

Suriname's state-owned oil company is planning a bond sale next year to finance offshore oil exploration, its chief executive said on Thursday, as it seeks to capitalize on growing hype over neighboring Guyana's looming oil boom.

The company, Staatsolie Maatschappij Suriname, would also consider listing some of its shares on the New York or London stock exchanges to help raise between $1 billion and $2 billion to develop its offshore drilling program, the executive, Rudolf Elias, told reporters.

Elias said he was optimistic that Staatsolie or one of its partner companies would strike oil soon.

It is expecting the results of a near-shore prospect well in three weeks, and the United States' Apache Corp is set to start drilling next month.

"Once we have that, and we know where to look for oil in our area, I expect that, like Guyana, we will get one find after another," Elias said in a press conference. "For Staatsolie, but also for Suriname, there are very exciting times ahead."

Proceeds from the bond sale would be used to finance Staatsolie's participation in future oil exploration campaigns, Elias told Reuters after the press conference.

Exxon Mobil Corp has discovered more than 5 billion barrels of oil in neighboring Guyana and expects to start producing next year. Earlier this week, Tullow Oil Plc's shares jumped 20% after it said it had made a large discovery offshore Guyana.

That has led to optimism that the same formations continue across the border into Suriname, a former Dutch colony with a population under 600,000. Staatsolie has signed production-sharing agreements with Exxon and Tullow, as well as others like Norway's Equinor and the United States' Hess Corp.

Suriname has not made any commercially viable offshore oil discoveries so far. Last year, Kosmos Energy abandoned an offshore well in Suriname after failing to make a discovery, but said it planned to continue testing the basin due to its potential.

Staatsolie, which operates a 17,000 barrel-per-day (bpd) refinery near capital Paramaribo, currently produces an average of 16,383 bpd of crude. The company turned a profit of $149 million before taxes in fiscal 2018, it said in a release on Thursday.

Staatsolie is also interested in taking over management of a hydroelectric dam that is being transferred to the Surinamese government from aluminum company Alcoa, which has wound down operations in the country.

"We would like to manage it, because it is good for an oil company to have renewables such as hydro in its portfolio," said Elias in reference to the Afobaka dam.


(Reporting by Ank Kuipers; Writing by Luc Cohen; Editing by Lisa Shumaker)



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