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((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Added quotes and details) by Ank Kuipers and Marianna Parraga
The French company TotalEnergies TTEF.PA and the American company APA Corp
APA.O announced on Tuesday a positive investment decision for Suriname’s most promising oil and gas project, Block 58, which is expected to usher in the country’s offshore production.
TotalEnergies plans to begin production on the $10.5 billion project in the first half of 2028. Reuters revealed the deal for the financial green light on Monday.
The small South American country wants to follow in the footsteps of neighboring Guyana, where a consortium led by Exxon Mobil
XOM.N has discovered more than 11 billion barrels of recoverable oil and gas resources.
Suriname is working to secure comparatively higher revenues through a legal framework including higher royalties and taxes, as well as signing bonuses that should be reinvested in healthcare and local content.
The announcement was made at the Suriname Presidential Office in the presence of President Chan Santokhi, TotalEnergies CEO Patrick Pouyanne, APA CEO John Christmann and Suriname National Energy Company CEO , Staatsolie, Annand Jagesar.
“Our policy, and this goes for any government, aims to increase the standard of living of our population significantly,” Mr Santokhi said.
A QUICK TRAJECTORY
TotalEnergies and APA plan to develop the Sapakara and Krabdagu fields, renamed “Gran Morgu”, whose combined recoverable resources are estimated at more than 700 million barrels.
“We are very proud of it,” Pouyanne said of the speed of development, which took only a year from completion of well evaluation to final investment decision (FID).
A floating production, storage and offloading (FPSO) facility built in Asia for the project, with a capacity of 200,000 barrels per day, is expected to be one of the company’s largest, Pouyanne said. This contract, as well as others including energy infrastructure builders SBM Offshore SBMO.AS and Saipem SPMI.MI , represent a total of $7 billion, he added.
A total of 32 new wells will be drilled under a field development plan approved and signed by TotalEnergies and APA on Tuesday, the companies said.
TotalEnergies, the project operator, expects to recoup around $1.4 billion spent exploring the area since 2019.
Staatsolie, which raised funds to take a 20% stake in the project, has secured a first payment of $175 million and is currently in talks with banks and planning a bond offering to make a second payment, said Managing Director Jagesar.
Pouyanne said the deadline for Staatsolie to complete its investment commitment could be extended until December next year if necessary.
APA Director General, Mr. Christmann, highlighted the geological potential of the deep waters of the Atlantic margin, which has resulted in important discoveries in Guyana, Suriname and Brazil.
“The FID is a point of no return,” Mr Jagesar said. “Suriname will never be the same again
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