TotalEnergies and APA Corporation announced a historic US$10.5bn Final Investment Decision (FID) to develop the “GranMorgu” oil field on Suriname’s Block 58.
This landmark project, which marks the nation’s first offshore oil development, is expected to generate significant economic growth and employment for the country.
“This FID is a historic milestone in Suriname’s oil and gas industry. What seemed like a distant dream is becoming a reality,” said Annand Jagesar, CEO of Staatsolie, Suriname’s national oil company, during a press conference.
The GranMorgu development, which includes the Sapakara and Krabdagu oil discoveries, is located 150 km off Suriname’s coast and holds recoverable reserves of over 750mn barrels of oil.
Patrick Pouyanné, Chairman and CEO of TotalEnergies, expressed optimism about the project, noting that “GranMorgu fits with our strategy to accelerate time-to-market and develop low-cost and low-emission oil projects.”
The development, which is the largest investment ever in Suriname, will include a 220,000 barrels-per-day Floating Production Storage and Offloading (FPSO) unit designed with advanced technologies to minimise greenhouse gas emissions, including zero routine flaring and full reinjection of associated gas.
With TotalEnergies’ commitment to fast-track the project, first oil is expected by 2028, providing a much-needed boost to Suriname’s economy. The development plan includes drilling 32 new wells and leveraging cutting-edge technology to ensure operational efficiency and environmental sustainability.
The consortium is expected to be able to produce oil for under US$20 per barrel, even with enforcement of TotalEnergies’ emissions cap of 18 kg of CO2-equivalent per barrel of oil equivalent on new projects.
Suriname’s President, Chandrikapersad Santokhi, hailed the investment as a major milestone for the nation, stating, “Suriname and its people welcome and appreciate this final investment decision… We consider this a historic and milestone occasion, creating significant opportunities and revenue prospects for Suriname, as well as attracting investors worldwide.”
The President added that the FID reflects Suriname’s commitment to developing its energy sector while adhering to environmental regulations and standards.
TotalEnergies and APA each hold a 50% stake in the project, with Staatsolie having the right to acquire up to a 20% interest by June 2025. Staatsolie CEO Annand Jagesar revealed that the company has already secured a US$175mn payment and are engaged in negotiations with financial institutions to float a bond to raise funds to make a second payment.
The GranMorgu is expected to create more than 6,000 jobs, including 2,000 direct and 4,000 indirect positions, and contribute over US$1bn in local content. Paramaribo will serve as the primary hub for administrative, support, and logistics activities, with the expectation that significant economic benefits will accrue to local communities.
“Our policy, and that will go for any government, is aiming to raise the standard of living for our population,” declared President Santokhi. He underscored the importance of reinvesting revenues into key sectors such as healthcare and infrastructure, emphasising the government’s strategy to leverage the project’s success to uplift the broader population.
In support of Suriname’s social development, TotalEnergies and APA signed a Memorandum of Understanding (MOU) with Suriname’s Health Ministry to fund the rehabilitation of two mother and child hospitals in Paramaribo.
Staatsolie CEO Annand Jagesar emphasised that the project will transform the nation’s economy and raise the standard of living for its citizens. The company estimated that the country’s oil and gas resources could bring in between US$16bn and US$26bn; a massive value when juxtaposed against Suriname’s US$4.34bn GDP.
The announcement of the FID has also garnered attention for its potential impact on the local economy. Suriname’s Finance Minister, Stanley Raghoebarsing, highlighted that at least US$1.5bn will be invested locally over the next three to four years, which will help stabilise the country’s exchange rates.
However, Raghoebarsing warned of the need to manage cash flows carefully to avoid overheating the economy, as experienced by neighbouring Guyana where there has been upward pressure on wages and some initial appreciation of the Guyanese Dollar.
The GranMorgu project is expected to replicate the success of Guyana’s offshore developments, where a consortium led by ExxonMobil has discovered over 11bn barrels of oil and gas resources.
APA’s CEO, John Christmann, echoed this optimism, highlighting that the immense geologic potential in the Atlantic Margin’s deep waters. “[This] FID is a point of no return, Suriname will never be the same,” declared Christmann to those gathered at the press conference.
Source: Caribbean Insight