📈 69% of S&P 500 stocks beating the index - a historic record! Pick the best ones with AI.See top stocks

TotalEnergies, APA greenlight $10.5 billion oil and gas project in Suriname

Published 10/01/2024, 08:36 AM
Updated 10/01/2024, 12:26 PM
© Reuters. FILE PHOTO: Patrick Pouyanne, Chief Executive Officer of TotalEnergies, arrives to attend a state dinner in honor of China's President Xi Jinping and his wife Peng Liyuan at the Elysee Palace in Paris, France, May 6, 2024. REUTERS/Sarah Meyssonnier/File P
TTEF
-
APA
-

By Ank Kuipers and Marianna Parraga

PARAMARIBO (Reuters) -France's TotalEnergies (EPA:TTEF) and U.S. APA Corp on Tuesday announced a positive investment decision for Suriname's most promising oil and gas project, Block 58, which is expected to inaugurate the nation's offshore output.

TotalEnergies expects to begin output at the $10.5 billion project in the first half of 2028. Reuters on Monday disclosed the agreement for the financial greenlight.

The small South American country wants to follow in the footsteps of neighboring Guyana, where a consortium led by Exxon Mobil (NYSE:XOM) has discovered more than 11 billion barrels of recoverable oil and gas resources.

Suriname is working to secure comparatively larger revenues through a legal framework including higher royalties and taxes, and signing bonuses that plan to be reinvested in healthcare and local content.

The announcement was made at Suriname's presidential cabinet in presence of President Chan Santokhi, TotalEnergies' CEO Patrick Pouyanne, APA's CEO John Christmann and the CEO of Suriname's state energy company Staatsolie, Annand Jagesar.

"Our policy, and that will go for any government, is aiming to raise the standard of living for our population will be significantly higher," Santokhi said.

FAST-TRACK

TotalEnergies and APA plan to develop the Sapakara and Krabdagu fields, renamed as "Gran Morgu", with combined recoverable resources estimated above 700 million barrels.

"We are very proud of it," Pouyanne said of the velocity of the development, which took only one year from the completion of well appraisal to the final investment decision (FID).

A Floating Production Storage and Offloading (FPSO) facility being built in Asia for the project, with a 200,000-barrel-per-day capacity, is expected to be one of the company's largest, Pouyanne said. That contract, along with others including energy infrastructure builders SBM Offshore and Saipem, represent a total of $7 billion, he added.

A total of 32 new wells will be drilled as part of a field development plan approved and signed by TotalEnergies and APA on Tuesday, the companies said.

TotalEnergies, the project's operator, plans to recover about $1.4 billion spent in exploration in the area since 2019.

Staatsolie, which has been raising funds to participate with a 20%-stake in the project, secured a first $175 million payment and is now in talks with banks and planning a bond offer to complete a second payment, CEO Jagesar said.

Pouyanne said a deadline for Staatsolie to complete its investment commitment could be extended through December next year if necessary.

© Reuters. TotalEnergies CEO Patrick Pouyanne and Suriname state-owned oil company Staatsolie CEO Annand Jagesar pose for a photo during a press conference after France's TotalEnergies and U.S. APA Corp announced a positive investment decision for Suriname's most promising oil and gas project, Block 58, which is expected to inaugurate the nation's offshore output, in Paramaribo, Suriname October 1, 2024. REUTERS/Ranu Abhelakh

APA's CEO Christmann underlined the geologic potential in the Atlantic Margin's deep waters, which has resulted in large discoveries in Guyana, Suriname and Brazil.

"FID is a point of no return," Jagesar said. "Suriname will never be the same."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.