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GY | Dec 16, 2020

Oil boom offshore Guyana-Suriname Basin continues to gain pace

/ Our Today

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ExxonMobil announces promising discovery off Suriname coast

ExxonMobil has used the Stena Carron drillship to drill multiple wells in the Guyana-Suriname Basin. (Photo: Stena Drilling)

The growing oil boom in the offshore Guyana-Suriname Basin continues to gain pace with the announcement by ExxonMobil that it has made a promising discovery off Suriname.  

The discovery, which was made in partnership with Malaysian state oil company, Petronas, was made in offshore Suriname Block 52, which neighbours Block 58, where American oil giant Apache Corporation made a slew of hydrocarbon discoveries since the start of this year. This latest discovery comes after ExxonMobil made a series of spectacular discoveries in offshore Guyana in 2020.

Petronas, which owns a 50 per cent interest in the block and is the operator, with Exxon owning the other half. The oil find was made at the much-hyped Sloanea-1 exploration well. It was only in May 2020 that Exxon completed its purchase of a 50 per cent interest in Block 52 from Petronas, which is now paying off with this latest oil find.

The motivation for ExxonMobil’s investment decision was the considerable potential held by offshore Suriname and is seeking to replicate its success in the Stabroek Block in Guyana.

Announcement made by Petronas

Petronas announced that, “the Sloanea-1 exploration well encountered several hydrocarbon-bearing sandstone packages with good reservoir qualities in the Campanian section”.

This discovery comes on the back of three oil finds by American oil giant, Apache Corporation and its French partner, Total in the neighbouring Block 58, which borders Exxon’s Stabroek asset.

While Petronas and Exxon are yet to quantify and the size and quality of the discovery, it is believed to possess considerable potential for oil. The value of this find is further underscored by the three oil finds made by Apache at neighbouring Block 58, since the start of 2020.

Apache described those finds as light crude oil and condensates with API gravities between 34 and 60 degrees. This accords with Exxon’s oil assay for the neighbouring Stabroek Block in offshore Guyana.

Exxon also has a one-third interest in deep-water offshore Suriname Block 59 with the remaining two-thirds split evenly between Hess and Equinor. Exxon acquired that interest in 2017 after its considerable success in offshore Guyana’s Stabroek Block.

Block 59 is situated to the north of Apache’s Block 58 and shares a maritime boundary with Guyana and the Stabroek Block. It has been reported that Exxon’s offshore Guyana operations, which are estimated to have a low breakeven cost of US$35 per barrel.

Suriname to be the next hot offshore drilling location globally

This is significantly lower than many other jurisdictions in South America. There is every indication that offshore Suriname possesses similar favourable characteristics, making it the next hot offshore drilling location globally.

U.S. Geological Survey estimates the Guyana-Suriname Basin holds up to 33 billion undiscovered barrels of oil.

There were two active drilling rigs in Suriname at the end of November 2020, the highest number since December 2019, that will likely increase as Petronas and Apache ramp-up activity. Suriname’s improved political stability since two-time coup maker and convicted murder, Desi Bouterse was wrestled from power by the former Justice Minister and Chief of Police Chandrikapersad ‘Chan’ Santokhi in national elections in July this year.

This has allowed the government to focus on exploiting the considerable petroleum wealth held in Suriname’s part of the Guyana-Suriname Basin. The oil potential is tremendous, as highlighted by the U.S. Geological Survey, which estimated the Guyana-Suriname Basin holds up to 33 billion undiscovered barrels of oil.

The new Surinamese government has embarked on a series of policy initiatives to attract investment and boost activity in Suriname’s oil patch. This saw the national oil company and industry regulator Staatsolie issue US$150 million of bonds in early 2020 to fund its 2021 to 2027 investment programme.

The development of Suriname’s considerable offshore petroleum potential will be a boon for a deeply impoverished country that has been sharply impacted by the global pandemic. 

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