The Suriname state oil company, Staatsolie which, as I mentioned last week, will be taking part in the IBC “Oil, Gas and LNG” Conference at the Hilton in a little over a week’s time, is convinced that Caricom’s only Dutch-speaking member has a good oil future ahead of it.
Suriname’s current proven oil reserves stand at 171 million barrels (mb), four million of which were added only this year after the drilling of two out-step wells in the only officially recognised oilfield Staatsolie currently has, called Tambaredjo, located in the district of Saramacca to the north of the country. (By way of comparison, T&T’s current proven oil reserves, as accepted by the Energy Ministry, amount to 990 million barrels).
Suriname’s reserves may be modest but at least they have enabled the country to become the second largest hydrocarbon producer in Caricom, at 12,200 b/d, behind Trinidad and Tobago, with about 138,000 b/d. (Cuba, incidentally, is the second biggest insular Caribbean oil producer, with about 69,000 b/d).
Trinidad will be increasing its lead over the rest dramatically from December next year when the new oil discovery in the Oligocene geological horizon in offshore block 2c, made by Australian multi-national BHP Billiton in 2001, begins to flow.
Cuba also reckons there are new finds to be made offshore (all its oil currently comes from land fields in the north west) and, according to Staatsolie, there are also good prospects both onshore and offshore Suriname.
In fact, its first-ever exploration atlas, recently compiled, reveals the likelihood of oil pools of over 100 million barrels.
This is the kind of bait the company is dangling before international oil companies in its Second Bidding Round for offshore blocks which opens in four days time and closes on May 24, 2004.
Thirteen blocks are up for auction under production sharing contracts (PSCs) and Staatsolie is hoping for a robust response on this occasion. Its seven-block First Bidding Round during November, 2001 and May, 2002, attracted no offers at all, which Managing director Dr Eddie Jharap attributed to “the worldwide exploration recession” at the time.
Good crude prices have now reversed that situation, so much so that a rig shortage may be developing as oil companies bump-up their oil-finding budgets internationally and Jharap hopes the Suriname off-shore may attract a piece of this action.
Of course, he also happens to be competing for exploration dollars with the Trinidad offshore area where 10 blocks are currently out for tender. But Dr Jharap is of the opinion that “different companies will probably be interested in the two countries, since Trinidad is a mature hydrocarbon area, whereas Suriname is not.”
Outside of the blocks up for bids, Suriname has also caught the eye of BHP Billiton, the same company that will shortly be boosting Trinidad’s oil output back up to 1980s levels and one whose eye is clearly worth catching.
The Australian major conducted what Staatsolie calls “a paper study” based on 2D offshore seismic shot in 1999 and reported that “hydrocarbon indicators were found.”
Repsol-YPF, which owns 30 per cent of BPTT in Trinidad and is a significant participant in the LNG industry locally, is also interested in Suriname, specifically some of the deepwater acreage beyond the edge of the Continental Shelf. The 2D seismic mentioned above was acquired by the Burlington Resources-led Suriname Deep Water Consortium (SDWC), though no exploration programme ever resulted.
Like BHP Billiton, Repsol-YPF has also studied the results of that seismic and seems keen to come to some formal agreement with Staatsolie, which is itself anxious to have the Suriname deepwater (not in the zone under dispute with Guyana) drilled up.
Staatsolie, which made a US$37.3 million pre-tax profit in 2002, says it is not averse to being involved with foreign companies in offshore activity but is really focusing its attention on the onshore, where the Tambaredjo field was discovered 21 years ago.
The new reserves recently identified in the western part of Tambaredjo gave hope that there is more oil to be discovered further to the west, perhaps right up to the Corentyne River, which serves as the boundary with Guyana.
In fact, following the completion of a seven well exploration delineation programme in the Calcutta block directly to the west of Tambaredjo, Staatsolie may be about to declare it a new oilfield. One well has been put on production, at 80 b/d. Another four producers will be drilled in 2004.
The Wayombo block to the east, surrendered by Koch Exploration Co in February this year after seven exploratory wells had been drilled, four of which had oil shows, is also still very prospective in Staatsolie’s eyes.
The company is now looking for new farm-in partners to do further exploration and, eventually, development in Wayombo.
Farm-ins are also a possibility for the Nickerie One and Nickerie Two blocks which are closest to Guyana of all Staatsolie’s acreage. Geo-chemical sampling in both blocks “provided some evidence of hydrocarbon presence in the deep surface,” Dr Jharap points out.
A “decision” on how to proceed further in Nickerie was to have been made this month.
The bottom line is that there will be no let up on exploratory initiatives onshore sponsored by Staatsolie and it is hoped that foreign companies will be minded to follow suit in the more expensive off-shore area.
Jharap says that the company will strive to have “at least two exploratory projects active at all times, at a cost of around US$4.5 million.”
The short-term production target for Tambaredjo alone is 17,500 b/d and Jharap has, in the past, spoken of a long-term production goal of 50,000 b/d.
If it ever gets there Staatsolie will be producing almost as much oil as Petrotrin does today from its land and Trinmar acreage.
The company, incidentally, has a small, 7000 b/d refinery which is obviously inadequate for processing all its crude. Only half the local crude is directed to the refinery for the production of diesel oil, fuel oil and bitumen. The rest is sold directly to the bauxite-alumina industry as unrefined fuel oil, used for blending or exported.