French TotalEnergies and American APA Corp will invest US$10 billion for oil extraction off Suriname, expected to yield 220,000 barrels per day by 2028. This historic investment aims to transform Suriname’s economy, boosting standards of living amidst existing economic challenges.
France’s TotalEnergies and APA Corp, an American hydrocarbon company, are poised to make a significant investment of US$10 billion aimed at oil extraction off the coast of Suriname. This venture, the largest investment in the nation’s history, was formally announced on Tuesday. TotalEnergies’ CEO, Patrick Pouyanné, noted that the first oil production is anticipated by mid-2028, with a production capacity of approximately 220,000 barrels per day. The investment centers around the GranMorgu project, located in offshore areas that are estimated to hold around 700 million barrels of oil, strategically adjacent to ExxonMobil’s successful operations in neighboring Guyana. President Chan Santokhi expressed optimism marking this event as a transformative milestone for Suriname, stating, “Today is a historic day for Suriname, a day that will determine our future.” In collaboration with TotalEnergies, APA Corp and Staatsolie, Suriname’s national oil corporation, will engage in this project. Staatsolie intends to issue bonds in 2025 to finance its 20 percent stake as stipulated under the production sharing contract. The company has already received an initial payment of US$175 million and is in negotiations with financial institutions to secure additional funding. President Santokhi detailed that the revenue generated from this undertaking is projected to enhance the standard of living in Suriname, a nation with a population exceeding 640,000 and a poverty rate of 18 percent, according to the Inter-American Development Bank. He termed the investment a “game-changer.” Amidst the investment, Suriname currently faces economic challenges, with a debt load of US$3.5 billion and undergoing a restructuring program under the International Monetary Fund amounting to US$688 million. Annand Jagesar, CEO of Staatsolie, remarked, “Suriname will never be the same” as a result of this deal, while also cautioning against potential governance issues that may arise, drawing comparisons to Venezuela’s economic struggles despite its vast oil reserves. TotalEnergies has committed to implementing advanced technologies aimed at responsible development and the minimization of greenhouse gas emissions.
The recent announcement of a US$10 billion investment by TotalEnergies and APA Corp in oil extraction off Suriname’s coast marks a pivotal moment for the nation, which has been striving for economic progress. Suriname, which currently undergoes austerity measures and an IMF restructuring program due to its substantial debt, stands to benefit from this large-scale project aimed at tapping into offshore oil reserves. The involvement of state-owned Staatsolie reflects the collaboration between international companies and local interests, emphasizing a future direction towards enhancing Suriname’s economy through resource development.
In summary, the investment of US$10 billion by TotalEnergies and APA Corp in the GranMorgu oil project signifies a substantial economic opportunity for Suriname. With expectations of significant oil production and revenue generation, government officials envision a better standard of living for its citizens. However, there are cautions regarding governance and dependency on oil resources, as highlighted by past experiences of other oil-rich nations. Navigating these challenges will be crucial for Suriname’s sustained growth and stability.
Original Source: jamaica-gleaner.com
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