French and US companies are set to make a monumental investment of $10 billion to extract oil off the coast of Suriname, as announced by officials on Tuesday. The investment involves France’s TotalEnergies and US-based APA Corp. This marks a historic milestone for the South American country. The project, known as GranMorgu, is expected to yield the first oil by mid-2028, with a projected daily production of 220,000 barrels, according to TotalEnergies CEO Patrick Pouyanné.
Suriname, a country with a population of over 640,000 and a poverty rate of 18%, is poised to benefit significantly from the anticipated revenue of the oil extraction project. President Chan Santokhi expressed great optimism about the investment, referring to it as a pivotal moment in determining Suriname’s future. The project will see TotalEnergies collaborating with APA Corp, which represents Apache Corporation, a Texas-based hydrocarbon exploration company, alongside Staatsolie, the national oil producer of Suriname.
With reserves estimated at around 700 million barrels of oil, the offshore area targeted by the GranMorgu project is located adjacent to a successful ExxonMobil venture in the waters of neighbouring Guyana. Staatsolie, holding a 20% stake in the production sharing contract, looks to finance its involvement through the issuance of bonds in 2025. The company has already received an initial payment of $175 million and is in discussions with financial institutions to finalise a second payment.
The CEO of Staatsolie, Annand Jagesar, hailed the oil exploration deal as a transformative moment for Suriname, emphasising that the country will be forever changed by the agreement. However, Jagesar cautioned against potential challenges related to governance, drawing parallels with Venezuela’s economic struggles despite possessing significant oil wealth. TotalEnergies has committed to employing advanced technologies to ensure responsible development of the project and to mitigate greenhouse gas emissions.
President Santokhi underlined that the revenue generated from the oil venture will be instrumental in improving the standard of living in Suriname. The country, which carries a debt of $3.5 billion and is currently undertaking a three-year IMF restructuring programme, is optimistic about the positive impact the investment will have on its economic outlook. The partnership between French and US companies signifies a major milestone in Suriname’s economic development and is viewed as a game-changer for the nation’s future.