Durrant Pate/Contributor

State-operated oil and gas company Staatsolie says Suriname’s first oil development in the shared basin could cost US$13.2 billion, making it the highest development expense for such a project.

This would put the Gran Morgu project costing more than any of the six projects already sanctioned for nearby Guyana in the same basin. The project includes a system of subsea wells connected to a floating production, storage and offloading (FPSO) vessel. 

TotalEnergies, the operator for the Gran Morgu project had reported that the project’s estimated cost is US$10.5 billion but this sum didn’t include the costs of inflation and unforeseen costs. 

“Including these costs, the total investment is estimated at US$13.2 billion,” Staatsolie reported in a December 30 note.

New bonds to provide project funding

Suriname, through Staatsolie, expects to participate in the project by tapping a 20 per cent right in the Block 58 petroleum agreement. The company estimates its contribution will amount to US$2.6 billion with a portion of this expected to be raised through the issuance of new bonds.

According to Staatsolie, “the launch of the bond issue is scheduled for January 2025. More information about, among other things, the term, interest rate, size of the denominations, and how to subscribe, will follow from the launch.”

The company plans for the other part of its contribution to be financed through loans and/or partnerships and its own contribution (which has already been secured). 

Staatsolie says its ability to participate in the landmark project is thanks to its solid performance in recent years, including a strong track record in financial management and sustainable relationships with banks and investors.

Major contracts already awarded 

According to OilNOW,  an online-based information and resource centre, “TotalEnergies and Block 58 partner, APA Corporation, made their final investment decision in the Gran Morgu project in October 2024….Some major contracts have already been awarded, including the hiring of SBM Offshore and Technip Energies to deliver the FPSO, as well as Saipem and TechnipFMC for the subsea work.”

The project will target oil production at a rate of 220,000 barrels per day (b/d), starting in 2028. In particular, the operational activities for drilling the wells will take place from Suriname.

Gran Morgu has brought optimism to Suriname, which has been struggling economically. In addition to direct revenue, the company expects the project to have a significant spin-off for the Surinamese economy, due to the employment of local labour and the local procurement of goods and services.