TotalEnergies greenlights ‘historic’ $10.5 billion oil project, enabling new dawn to break over Suriname’s economy (Video)

France’s energy giant TotalEnergies has kept its word by reaching a final investment decision (FID) for a giant oil project in Block 58 off the coast of Suriname before the year-end, as promised. With the construction and installation phases estimated to take approximately four years, the first oil is anticipated in 2028 at the earliest. The existing market prices indicate that the development will cost over $10 billion.

As the front-end engineering design (FEED) studies for Block 58’s two main oil discoveries, Sapakara South and Krabdagu, were perceived to be progressing well, TotalEnergies planned to take the FID for the project in the fourth quarter of 2024. In line with this, the French energy giant has now sanctioned the GranMorgu development, which is interpreted to mean both “new dawn” and “Goliath grouper” in the local language called Sranan Tongo.

The GranMorgu project will develop the Sapakara and Krabdagu oil discoveries, on which an exploration and appraisal campaign was completed in 2023. The fields are located 150 km off the coast of Suriname and hold recoverable reserves estimated at over 750 million barrels in water depths between 100 and 1,000 meters.

The FID was confirmed on October 1 by Patrick Pouyanné, Chairman and CEO of TotalEnergies, who met in Paramaribo with Chandrikapersad Santokhi, President of the Republic of Suriname, and Annand Jagesar, CEO of Staatsolie Maatschappij Suriname, Suriname’s national oil company (NOC).

The GranMorgu project, which is said to mark the beginning of a new era of sustainable growth opportunities not just for Suriname’s energy sector but also for the country itself, is inspired by the majestic Goliath Grouper (Granmorgu) that can be found in the coastal waters of Suriname.

“With its size, the Granmorgu symbolizes the magnitude and significance of the upcoming development in Block 58. The fish can live up to forty years, which also indicates the productivity years of the GranMorgu project (minimum 20-25 years). Gran morgu means more or less ‘a beautiful morning’ in Surinamese, which represents a new dawn and the promise of a new beginning,” outlined Staatsolie.

According to TotalEnergies, the project leverages technology to minimize greenhouse gas emissions, with a scope 1 and 2 emissions intensity below 16 kg CO2e/boe, thanks in particular to an all-electric floating production, storage, and offloading (FPSO) unit configuration, with zero routine flaring and full reinjection of associated gas into the reservoirs; an optimized power usage with a waste heat recovery unit and optimized water cooling for improved efficiency; and the installation of a permanent methane detection and monitoring system relying on a network of sensors.

Pouyanné highlighted: “I am very pleased to launch today the GranMorgu project alongside our partners Staatsolie and APA and I sincerely thank the State of Suriname for its strong support. Building on TotalEnergies’ pioneering spirit, this landmark project marks the first offshore development in the country and capitalizes on our extensive expertise in deep offshore innovation.

“Launched only a year after the end of appraisal, GranMorgu fits with our strategy to accelerate time-to-market and develop low-cost and low emission oil projects. We look forward to continuing our fruitful collaboration with Staatsolie to deliver a transformative project for Suriname’s economy.”

With a daily capacity of 220,000 barrels of oil, the FPSO is described as replicating a proven and efficient design. The company estimates the total investment in the project at around $10.5 billion, with the first oil slated for 2028. The FPSO GranMorgu is designed to accommodate future tie-back opportunities to extend its production plateau, as five discoveries have been made in Block 58 to date, however, only two major oil discoveries have now been approved for development over a production period of 20-25 years.

“Suriname and its people welcome and appreciate the final investment decision of Total Energies and APA Corporation regarding Block 58 with Staatsolie Suriname NV. We consider this a historic and milestone occasion, creating significant opportunities and revenue prospects for Suriname, as well as attracting investors worldwide,” emphasized Santokhi.

 “This important decision will boost our domestic capabilities and investments and have a major impact on local content opportunities. Suriname is committed to a strong and loyal partnership and expects that the offshore oil and gas development will take off in compliance with environmentally regulations and standard.”

The concept for the development is based on the FPSO with a maximum production capacity of 220,000 barrels of oil per day, connected to a subsea network at a water depth of 100 to 1,000 meters. Staatsolie claims that the FPSO’s hull has already been built. TotalEnergies made a hull reservation with the Netherlands-based SBM Offshore in June 2024.

While TotalEnergies is the operator of Block 58 with a 50% interest, alongside APA Corporation, which holds the remaining 50% stake, Staatsolie has revealed its intent to exercise its option to enter the development project with up to 20% interest.

As a result, partners agreed that Staatsolie will contribute to the project from FID and will finalize its interest before June 2025. The development phase involves drilling around 32 wells, installing subsea installations, and pipelines, and placing the modules on the already purchased floating platform over the next four years.

Around half of the wells planned to be drilled will be for oil production and the other half is expected to be used for injecting back water and gas with the oil. Two drilling rigs are anticipated to be deployed, with the operational activities for well drilling taking place from Suriname, adding a boost to the Surinamese economy, due to the purchase of local labor, goods, and services.

TotalEnergies underlines that significant investments will be made in local content and job creation with Paramaribo serving as the primary hub for administrative, support, and logistic activities, thus, local companies will be involved in logistics, well services, as well as the installation and operations of the subsea systems and the FPSO.

In preparation for the development activities, the operator carried out an environmental and social impact study, with the potential risks and measures to be taken mapped out. Following public consultations with various stakeholders, the report is now under assessment with the National Environmental Authority (NMA) of Suriname. 

Once oil production starts in 2028, most of the net income is expected to go to the state of Suriname, such as royalties, profit oil, and taxes. Depending on the oil price, this could be between $16 and $26 billion over the estimated life of the production field. The overall local content is estimated to be more than $1 billion with over 6,000 jobs (2,000 direct and 4,000 indirect and induced) expected to be created in Suriname.

Jagesar underlined: “The FID is a historic milestone in Suriname’s oil and gas industry. What seemed like a distant dream is becoming a reality. This will be the largest investment ever in our country. Deliberations with TotalEnergies were always constructive and we thank them for the cooperation to arrive at this moment.

“This project will yield significant income for Suriname and needs to lead to better living standards for every citizen of Suriname. We are convinced, based on the measures taken and the track record of TotalEnergies, that the GranMorgu project will have a worldclass operational and environmental performance.”