Suriname will prioritize oil companies that teach them to operate blockchain
By Mikaila Prince
Kaieteur News- Governments around the world make big money when they award oil and gas contracts through open, competitive bidding processes. And that’s the path the Surinamese government took when it announced in November 2020 that it had eight oil blocks for auction.
The eight blocks proposed total over 13,524 km2 of unexplored, but “extremely viable” acreage in the Guyana-Suriname basin. This is the same basin where ExxonMobil and its consortium of oil companies have made 18 discoveries, totaling more than nine billion barrels of oil equivalent.
When asked to provide some insight into the bidding process, Rudolf Elias, CEO of state oil company Suriname, Staatsolie, revealed that he is giving priority to those oil companies that propose to become an executive in 10 years’ time .
Elias shared these and other details during his first appearance on Kaieteur Radio’s Guyana’s Oil & You program on February 4 last.
Managing Director and CEO of Staatsolie Suriname, Rudolf Elias
There, the CEO boasted that despite fixed collections, Staatsolie’s captive as its royalty of 6%, and 36% revenue collections and its 20% participation interest, the state oil company has seen “huge interest” from international oil companies seeking to secure the eight blocks.
Elias further noted that oil companies would have to handle all exploration costs, while Staatsolie was only jumping in on the project development phase. This provision differs from Guyana, which covers all oil company costs, including exploration, development and production costs
“But what we said this time,” explained the CEO, “because it’s not in our deep, deep water, but it’s between water that is zero and five meters and 75 meters, you can work with a jack up. But we said we will also add a lot of value to the company that will teach us how to become an oilfield operator in the offshore, shallow offshore business. ”
He went on to add, “So do they [oil companies] get all the data we have. They should come up [with] the program and if a company offers a program and says so [it] drilling two wells over the next two years and we will assure you to be an operator in ten years time, [and] we will build your capacity, then they will be the ones getting the block. This is more or less how we do it. ”
Taking even further advantage of its opportunities, Staatsolie has been studying Suriname’s large offshore shallow water acreage, for which it has collected a wealth of data. On its website, the state-run oil company explained how its operations are in the near shore areas. Although it did not produce material discoveries, it has already done enough to confirm the “potential” of oil in the coastal area.
Kaieteur News had reported on how data collected about some areas could increase the value of the acreage. For the same reason Guyana has been urged by industry experts to ensure that it publishes data on blocks surrendered as quickly as possible.
Surprisingly, Suriname could rake up hundreds of millions of dollars when signing bonuses for the shallow water block (s). It has already begun to do so for its blocks since ExxonMobil continued to de-risk the Guyana-Suriname basin.
For example, Total agreed to pay $ 100M to Apache for a 50 percent stake in the 1.4 million-acre Block 58. That equates to more than five times that a paltry Guyana took US $ 18M from ExxonMobil for the 6.6 million Stabroek Block acres.
As reported in Kaieteur News, Donald Ramotar’s administration had ignored the Guyana Geology and Mines Commission (GGMC) when the regulator advised that the government could facilitate a competitive bid acquiring Guyana ‘C’ oil block, after at least four oil companies showed interest in the area. Two of the interested companies were Repsol from Spain, and Royal Dutch Shell from the Netherlands, both major oil and gas international players, as a source announced.
Many have criticized Guyana’s contract with ExxonMobil as being tame and unfair to the people of Guyana. Global Witness had even calculated that the poor terms would cause the country to lose US $ 55B over the life of the contract. He has criticized Guyana’s leaders for the part they played in signing the huge concession to the multinationals, ExxonMobil, Hess and CNOOC.
Despite facing international and local condemnation, none of the major parties has shown an interest in securing better terms for the people. ExxonMobil has even boasted that it has received assurances from the parties that the contract will remain intact, and that its projects will be allowed to proceed.