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Physical Edition
28-30 June 2022

By: William Walker

The thunderstorms over Paramaribo this week failed to dampen the sunny discussions at the Suriname Energy Oil and Gas Summit 2021 which forecast the country joining Guyana as an economic powerhouse of the southern Caribbean.

The main clouds on the horizon, however, included the concern oil and gas revenues might not be fully harnessed for the people, whether Suriname can deal with so much international attention, and whether the snowballing climate change debate might strangle the country’s offshore industry in its infancy.

Similar challenges face neighboring Guyana which in terms of production is about five years ahead of Suriname but in other ways is actually behind it. With some 150 employees, the national oil company Staatsolie appears to be handling the “overwhelming” task of building and regulating an offshore oil and gas sector more effectively and openly. For example in the areas of shallow offshore concessions, a set of three blocks have already attracted ten bids in the western portion. A next bid round for the central and eastern blocks is planned for 2023 after high quality seismic is conducted in Q4 2021. Sadly because of the political turmoil in Guyana since late 2018, the country’s own plans for near shore concessions have been delayed and there is no clarity as to when or how such auctions might occur, even as interest may be dampened by the climate change debate. Wafik Beydoun Americas Director for the International Association of Oil and Gas Producers said the Guyana Suriname Basin could be the last frontier for offshore exploration.

Better together?

What was refreshing was the transparency and confidence with which Staatsolie’s highly experienced management talked about its work. And it makes one wonder the possibility of an exchange programme with Guyana as part of closer collaboration and knowledge sharing. Blue Sky thinking might even imagine the considerable savings and synergies to be had from a joint oil response team, a common customs union for the basin, a joint mega shore base (on the Corentyne?) and dare we say it, one gas to shore pipeline? Because what also came out of the summit was that Suriname is going to struggle to find uses for the quantities of gas its fields might generate, a similar situation for Guyana with that being partly the justification, along with the massive infrastructure costs, for the proposed Wales industrial park.

Love us or we might leave

The summit heard that the geology of the Guyana/Suriname Basin seems to point to higher gas to oil ratios (GOR) the further south east one ventures along the Golden Lane into Suriname with one recent find confirmed as gas. This might explain comments by Foreign Minister Albert Ramdin about linking up with populous north eastern Brazil to create some kind of energy/economic block. (He mentioned that Guyana, Suriname and Brazil’s leaders plan to meet this year in that regard) Ramdin also had some cautionary words for Caricom leaders who might not accept a “new paradigm” where Suriname and Guyana will become the region’s economic powerhouses with the diplomatic leverage that would result. Love us or we might leave. Several contributors also talked about the growing attention of the globe’s super powers: the Center for Strategic and International Studies’ Daniel Runde said Suriname is going to "get a lot of new friends" but needs to choose carefully. "I hope my country the US" becomes more engaged and that this could help ease Suriname out of its “relative isolation”. This attention will be a challenge for both countries to navigate as Guyana learned recently with its Taiwan Office U-Turn .

Climate Change

There was much talk about recent developments related to the climate change debate including the International Energy Agency’s Net Zero Emissions report and how that might hamper Suriname’s development. Most of the panelists were soothing, talking about how the report is simply a scenario, and in any event the basin’s oil is advantaged, being low cost, high quality and in America’s backyard. But as we have seen over the past few years, the climate change debate is snowballing and creating uncertainties and unexpected developments even for the biggest IOCs. It is of interest that Shell which only this week was the victim of a Dutch court ruling ordering it to cut emissions by 45% by 2030 acquired Kosmos’ share of Block 42 (Chevron, Hess partners). As an aside, Shell's Bill Langin recalled that when the company exited Stabroek Block in 2014, months before the Liza find, Shell was “in a consolidation phase” and it didn't fit with the core effort…”Clearly that was one we didn't get right at the time". A lot of the talk was about Suriname already being a carbon sink with some hydropower energy, and that gas would actually help lower its emissions in the interim.

These echo many of the arguments being made in Guyana, where a court case has recently been brought by two citizens saying oil production violates their constitutional rights to a healthy environment. It is not clear how prepared the administration is to respond to the case, although the ever alert VP Bharrat Jagdeo did tell OilNow: “In terms of global responsibility, I think Guyana pays more than its fair share in terms of the effort to achieve 1.5 [degrees celsius] although we are not responsible historically for the current level of CO2e gases which is causing global warming.”