Staatsolie Maatschappij Suriname N.V. – Drilling Value for Suriname
From exploration and drilling to refining and marketing, Staatsolie knows the oil industry from end-to-end.
Staatsolie Maatschappij Suriname N.V. is the Surinamese national oil company. Headquartered in Paramaribo, Staatsolie is tasked with all oil-related activities, from exploration and drilling to refining and marketing, as well as monitoring contracts with international oil companies present in Suriname.
The company was founded in 1980 to execute the oil policy on behalf of the Surinamese state – the company’s sole shareholder. Commercial production started in 1982, and today Staatsolie produces enough diesel at their refinery to meet the entire local demand and gasoline for part of it. Since 2015, Staatsolie has invested over US$1 billion in the further expansion of their operations, but no matter how the company has grown it remains committed to HSEC, integrity, its people, excellence, and accountability.
Recently, the company has been getting even more deeply involved in the offshore exploration side of their business. Typically, Staatsolie has worked with its partners, reputable IOCs who they have production sharing contracts with, to engage in offshore exploration. In its role as the petroleum regulator, Staatsolie acts on behalf of the State in assessing Suriname’s offshore and onshore hydrocarbon potential, attracting qualified international oil companies, negotiating petroleum contracts and monitoring the execution of such contracts.
However, last year Staatsolie carried out the Nearshore Drilling Project on its own.
The Nearshore Drilling Project was set up to carry out exploration drilling in the nearshore. The program started on 1 April and was closed in December 2019. Six exploratory wells were drilled off the coast. No commercial oil discovery was made, but valuable data was collected.
The project would cover a vast area and a challenging one. The nearshore area has a size of 12,000 square kilometres. Limited data is available from this area because hardly any exploration has been done. Staatsolie believes it is important to continue exploring this area. Now that well data has been collected, the seismic data can be associated with this specific information. The area up to forty kilometres from the coastline is called nearshore and has water depths of up to thirty meters. This was one of the biggest exploration projects that Staatsolie has ever executed on its own.
A project of this magnitude was never going to be entirely easy, and Staatsolie was well aware from the start that there would be challenges along the way.
One of the biggest challenges was the magnitude of this operation. It was in many ways new to Staatsolie and the communities wherein it operated. The project team and contractors were specifically selected and attracted for this project and never worked together before. Staatsolie could not build on recent experience. Everything had to be planned meticulously.
Even as prepared as they were, a project like this will often bring unexpected challenges.
During the project, and as often happens with drilling projects, there were a number of unforeseen technical challenges which had to be solved on the spot.
These challenges were exacerbated by the fact that Staatsolie was effectively working without the support of an established industry. Suriname has no established offshore industry which can provide on-demand and fast support in case of calamities.
Almost all 300 people, the drilling Rig all vessels, thousands of pieces of specialty materials and equipment and even chemicals such as cement had to be mobilized from abroad by vessel or aeroplane. Another challenge was the absence of in-country emergency response capability which had to be planned and created especially for this project. The preparations for this project started in 2017.
Because Staatsolie was aware of these risks from the start, a great deal of preparation went into the project’s preparations.
It started by reviewing the lessons learned from the previous Block 4 project with the project team members who executed the project at the time. A lot was learned from that and yielded a lot of prevention scope. Also, with the support from this previous project team, hired specialists and later-on with contractors many risk management sessions were held, where jointly the execution and identified execution risks and proper mitigations were simulated. Risks which were exposed by the ESIA consultants were taken to the heart and mitigations thereto were agreed upon.
Risk mitigations were not only implemented in the execution plans but also shared with Staatsolie’s contractors to ensure everyone was working from the same page. Contingency plans were in place where additional spare materials, tools and spare parts were stored on locations. The project team was trained to manage potential emergency scenarios. Special standby emergency response services and capability were hired and mobilized to Suriname such as a 24/7 manned emergency response vessel which was always on location of the Rig and a 24/7 ready to fly medevac helicopter and crew. All of these contingencies were subject to numerous and regular drills to test readiness.
Rewarding the Nation
The ultimate goal of this project, as with all of Staatsolie’s work, is to unlock value for the entire nation of Suriname.
Staatsolie makes sure that the value from petroleum operations is optimised for the Surinamese society through prudent resource management with the utmost respect for the environment and the highest regard for safety. Staatsolie generates earnings from its various commercial activities and partnership in a gold mine. Its contribution from earnings to Suriname’s government, consisting of taxes, dividend and royalties are significant; making Staatsolie a major contributor to the Surinamese economy. In the period 2010-2018, the government contribution amounted to US$ 1,76 billion. Through the Staatsolie Foundation and direct investments, Staatsolie is proud to help support a range of initiatives that improve the health, education and development of the people of Suriname. Since 2017, Staatsolie has placed an emphasis on working closely with the communities most directly connected to its operations.
Moving forward, Staatsolie has great plans for 2020, driven by its Strategy for Success 2016-2020.
The strategy contains six key elements, an HSEC commitment, the desire to refocus upstream through the Nearshore Drilling Project, optimising their downstream operations, preparing for an IPO and generally simplifying their processes. Finally, the company aims to remain as people-focused as it always has been.
Staatsolie is determined to have the right people in the right roles at all times. Therefore, the company has put in place policies and programs for capabilities assessments and 360-degree feedback, job rotation, secondments to IOCs, and succession planning, together with coaching and mentoring to make the pool of young people ready by design. Also, the Culture Change program is being conducted to imbed integrity, excellence, accountability and performance management in daily operations.