Staatsolie Maatschappij Suriname N.V. – Supporting Suriname Through Discovery

Suriname’s national oil company is engaged in a number of exciting oil discoveries, but what the company is most eager to discover are ways to benefit the country.

Staatsolie Maatschappij Suriname N.V. is the Surinamese national oil company. It started out as a crude oil producer. Since then the company has diversified in its value-added oil business, refining crude to ultra-low sulphur diesel and gasoline and building its increasingly capable workforce.

Staatsolie has been producing and refining crude oil and selling petroleum products for almost four decades, as well as thermal energy since 2006, but also produces renewable energy to generate electricity in Suriname, including hydro-electric energy at its Afobaka power plant. Recently the company has expanded into the gold mining sector, while also making several major offshore hydrocarbon discoveries through its partners, PSC. Staatsolie believes these discoveries have the potential to transform Suriname.

Age of Discoveries

That goal, to “transform Suriname” is key to Staatsolie’s outlook, and its recent oil discoveries pose the opportunity to do just that. Staatsolie is currently on the verge of a new era, with new four hydrocarbon discoveries in Block 58 by Apache and Total and another at Block 52 offshore Suriname made by Petronas. In the light of these new discoveries, neither Staatsolie nor Suriname as a whole will ever be the same.

“We anticipate more discoveries and we are continuing the necessary steps to participate in these opportunities with a sense of urgency,” insists outgoing CEO and Managing Director of Staatsolie, Rudolf Elias.

“We anticipate first oil from offshore may only be five years away.”

In terms of time, the Block 58 operator has submitted appraisal programs of discoveries. This is a phase that can last up to two years based on the production sharing agreement, and during that time the size of the field will be determined and the company will decide if it can be developed commercially.

“So, at this moment, nothing can be said about when production will start and what the production capacity will be. Any news on the findings of the appraisal will be shared by the operator of Block 58,” Elias explains. “At the end of the appraisal phase, the commercial field is thus established, and the development plan is started.”

The production phase will start as soon as the facilities have been completed, with Staatsolie entitled to participate up to 20% in the development of a field.

Improving Society Through Infrastructure

The company exists not just to make a profit, but to improve society as a whole through ambitious infrastructure investment. As well as the infrastructure investment itself, Staatsolie is involved in a wide range of schemes to support local communities and the environment.

“We structurally support many community initiatives, focusing mostly on the areas where we operate. We have invested mainly in the development of young people, people with disabilities and the environment,” says Elias. “In the Tout Lui Faut community where we have our refinery operations, amongst others, we have a scholarship project. We support students financially who achieved excellent school results and guide them through a coaching program.”

As part of an environmental initiative, Staatsolie has started using a drone to measure the air quality above and around its refinery. To fine-tune future improvements the company has also implemented odour research in the neighbourhood. Two neighbourhood playgrounds originally donated by Staatsolie were expanded in 2019 and were put to full use during a camp organised with local schools.

In the communities around its upstream activities in the district of Saramacca, Staatsolie improved roads, financially supported local government with household waste collection, worked to enhance classrooms of schools in the nearby communities, supported the upgrading of internet connections and also helped provide IT training in rural areas where people have no experience with computers. In 2019, nine community organisations in Saramacca have been trained to submit funding requests to Staatsolie to implement projects supporting sustainability and the environment.

An example of these kinds of projects can be seen in Staatsolie’s funding of the construction of new housing for visually impaired Shiatsu masseurs. The Foundation for the Visually Impaired in Suriname teaches its pupils how to perform Shiatsu massages. With the new building, more masseurs can be accommodated and become self-supporting. This project was completed in 2019.

“Financial support to our communities is provided not only through Staatsolie and our own Staatsolie Foundation but it is also secured in production sharing contracts we close with IOCs,” Elias says. “Through these contracts, we annually allocate US$ 1.2 million for CSR initiatives. Newmont, as an operator of our joint venture in the Merian goldmine, has a foundation that contributes as well. Combined, a total of more than US$ 1.5 million is available annually to make a positive difference for the people of Suriname.”

The Partner of Choice

Moving forward, Staatsolie’s goal is to transition into being the partner of choice for the IOCs. Its strategy is to safely create and maximise long-term value for shareholders and the people of the Republic of Suriname by exploring and producing energy resources whilst pursuing world-class standards.

Over the next five years, Staatsolie will work to sustain onshore crude production at 6 million barrels annually, remain a first cost quartile oil producer, and establish joint venture partnerships in the shallow offshore.

Staatsolie will also be participating in deep offshore field development and production, as well as developing and exploiting alternative energy sources and strengthening the entire organisation to world-class standards.

“We have launched a bid round for the shallow offshore, an exciting acreage between multiple discoveries and known oil fields,” Elias says. “By the third quarter of 2021 we hope to announce successful bids.”

Staatsolie’s goal is to reach an agreement on terms that will ultimately power Staatsolie’s journey to developing into a shallow offshore operator within the next 10-15 years.

Meanwhile, looking to the near future, given the developments in the offshore sector, Staatsolie’s focus in 2021 will be on preparing the funding for its 20% participation right, as well as further strengthening the organisation.

Once again, however, talking to Elias it is clear that his real interest is in how these efforts will allow Staatsolie to aid Suriname as a whole.

“In the next years we will intensify our efforts in creating awareness for local content development in Suriname so that local companies are ready and able to play a role in the offshore oil and gas industry,” Elias explains. “By creating a maximum spin-off, the people of Suriname will be able to benefit significantly from the industry it will bring in for the country.”

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