TotalEnergies and APA Corporation have announced the Final Investment Decision (FID) for the development of a production field in Block 58 offshore Suriname. The construction and installation phase will take approximately four years, meaning that first oil will be produced in 2028 at the earliest.
Patrick Pouyanné, Chairman and Chief Executive Officer of TotalEnergies and John Christmann, Chief Executive Officer of APA Corporation, in the presence of Annand Jagesar, Managing Director of Staatsolie Maatschappij Suriname N.V., today communicated the final investment decision officially by to the President of Suriname, Chandrikapersad Santokhi. Pouyanné, who travelled to Suriname especially for this purpose, presented a summary of the Field Development Plan (FDP) approved by Staatsolie to President Santokhi. The FDP describes how the field will be developed, the technical aspects and a timeline. Staatsolie and TotalEnergies aim to execute the GranMorgu project, as the development is called, according to the agreed timeline and to realize the first oil production in 2028.
TotalEnergies is the operator in the partnership with APA in Block 58, each with a fifty percent interest. The development of the field will be fully focused on oil. According to current estimates and prices on the market, this will cost more than US$ 10 billion. In the production sharing contract, it was agreed that Staatsolie has the right to participate for a maximum of twenty percent in the development and production of the commercial field. It was agreed that we will participate for twenty percent from the moment FID was announced, but that the first two payments will be made according to a pre-agreed timetable. This has been planned in such a way that it gives Staatsolie sufficient time to arrange its financing or to reduce the participation percentage. Staatsolie does not intend to reduce its participation percentage but found it wise to agree on that possibility as well.
“The FID is a historic milestone in Suriname’s oil and gas industry,” says Annand Jagesar. “What seemed like a distant dream is becoming reality. This will be the largest investment ever in our country; one in which Suriname will receive the largest share of the ‘take’. Staatsolie will supervise this. This new opportunity comes with a shared obligation to ensure that Suriname will benefit optimally from the incomes from offshore oil. These will have to be put in use for the long-term prosperity of all Surinamese. This can be achieved through good governance, transparency, zero corruption and the establishment and strengthening of institutions that must guarantee that this income benefits the development of the entire Surinamese society.”
President Chandrikapersad Santokhi: “Suriname and its people welcome and appreciate the final investment decision of Total Energies and APA Corporation regarding Block 58 with Staatsolie. We consider this a historic and milestone occasion, creating significant opportunities and revenue prospects for Suriname, as well as attracting investors worldwide.
This important decision will boost our domestic capabilities and investments and have a major impact on local content opportunities. Suriname is committed to a strong and loyal partnership and expects that the offshore oil and gas development will take off in compliance with environmentally regulations and standard.”
Patrick Pouyanné said: “I am delighted to launch the GranMorgu project today together with our partners Staatsolie and APA and with the strong support of the State of Suriname. Building on the pioneering spirit of TotalEnergies , this ground-breaking project marks the first offshore development in the country, applying our extensive expertise in FPSO innovation. Launched just one year after the assessment process was completed, GranMorgu fits our strategy to develop low-cost, low-emission oil projects. We look forward to continuing our fruitful collaboration with Staatsolie to deliver a project that will have the potential to significantly change the economy of Suriname for the better.”
The development of Sapakara South and Krabdagu have been combined under the project name 'GranMorgu'. This name marks the beginning of a new and important era for the energy sector of Suriname, but also for the country itself with new opportunities to work dedicatedly towards sustainable growth and progress. The name GranMorgu is inspired by the majestic Goliath Grouper (Granmorgu) that can be found in the coastal waters of Suriname. With its size, the Granmorgu symbolizes the magnitude and significance of the upcoming development in Block 58. The fish can live up to forty years, which also indicates the productivity years of the GranMorgu project (minimum 20-25 years). Gran morgu means more or less 'a beautiful morning' in Surinamese, which represents a new dawn and the promise of a new beginning.
Since 2019, five discoveries have been made in Block 58. The two major oil discoveries, Sapakara South and Krabdagu, have combined reserves of approximately 750 million barrels. These reserves will be developed over a production period of 20-25 years. The concept for the development of the production field is based on a floating production and storage facility ( FPSO ) with a maximum production capacity of 220,000 barrels of oil per day, connected to a subsea network at a water depth of 100 to 1,000 meters. The hull of the FPSO has already been built. The design of the FPSO aims to minimize the impact on the environment, including low emissions of greenhouse gases directly released during oil production.
The development phase involves drilling wells, installing subsea installations and pipelines and placing the modules on the already purchased floating platform over the next four years. A total of around 32 wells will be drilled: approximately half for oil production and the other half for injecting back water and gas with the oil. It is expected that two drilling machines will be deployed. The operational activities for drilling the wells will take place from Suriname. This will have a major spin-off for the Surinamese economy, due to the purchase of local labor, goods and services (local content).
In preparation of the development activities, TotalEnergies had an environmental and social impact study carried out. The potential risks and measures to be taken were mapped out. The report was discussed in public consultations with the various stakeholders. The document is now in the assessment process of the National Environmental Authority (NMA) of Suriname.
After oil production has started from 2028, the majority of the net income will go to the state of Suriname. Suriname's income consists of royalties , profit oil and taxes. Depending on the oil price, this could be between US$ 16 and US$ 26 billion over the estimated life of the production field. In addition to the direct contributions to the state treasury, there will also be indirect income from local content . Staatsolie and TotalEnergies will continue to work closely together to attract as many local goods and services as possible, as was done in the exploration and evaluation phase.
Together with the FID announcement, TotalEnergies and partner APA have confirmed their support for the rehabilitation of two hospitals in Paramaribo. To this end, an agreement (Memorandum of Understanding) has been signed with the Ministry of Health. This involves a significant amount.