Chevron inks contract for fresh block off Suriname

Suriname’s national oil company Staatsolie and oil major Chevron are expanding their cooperation in shallow offshore Suriname following the signing of a production sharing contract for offshore Block 7.

The PSC was signed for this purpose last Tuesday and Staatsolie announced it on Wednesday. Block 7 is in the west of the shallow offshore area and has a size of 1867km2.

With the signing of the PSC, Chevron, with an 80 per cent participating interest, has obtained exploration, development, and production rights in Block 7. Staatsolie has a 20 per cent participation share through its subsidiary Paradise Oil Company N.V. (POC).

The contract was signed by Staatsolie CEO, Annand Jagesar, POC Director, Rekha Bissumbhar, and Chevron’s Suriname Country Manager, Channa Kurukulasuriya. Minister David Abiamofo of Natural Resources was present on behalf of the shareholder (the State of Suriname) at the signing at the headquarters of Staatsolie.

The cooperation between POC and Chevron was confirmed with the signing of the Joint Operating Agreement (JOA) in which the arrangements between the partners are laid down. The agreements enable Staatsolie to play an active role in the block partnership from day one. The costs in the exploration phase will be carried by Chevron. The exploration period, as set out in Chevron’s PSC, will last eight years, divided into three phases.

The PSC also states that Chevron should give preference to materials, services, and products offered by Surinamese companies with the condition that they meet the quality, price, and other commercial requirements.

Previous agreements between Staatsolie and Chevron include the one made in October 2021, when the two signed a 30-year PSC for Block 5, in which Staatsolie has the right to a 40 per cent participation through its subsidiary POC.

In December 2021, Chevron farmed out one-third of its 60 per cent stake in Block 5 to Shell (KE Suriname BV). POC retained its 40 per cent stake as a non-executive partner.