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Suriname's Staatsolie signs gas exploration deal with Petronas, Exxon

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Reuters
Reuters
March 04, 2024

PARAMARIBO (Reuters) - Suriname's Staatsolie said on Monday that Malaysia's Petronas and U.S. oil giant Exxon Mobil have agreed to extend exploration of a gas discovery off its coast, and are considering the potential for a floating LNG project.

Petronas and Exxon made a gas discovery in 2020 at offshore Block 52, but they considered it commercially unattractive.

Staatsolie said in a statement that following talks with Petronas, the companies have committed through a letter of agreement to further explore the Sloanea-1 discovery and make feasible the development of a commercial gas field in Block 52.

"A key component of feasibility is the guarantee of a tax-free period of 10 years from the start of production. This is also stipulated in the letter of agreement, with government approval," Staatsolie added.

The head of Petronas in Suriname, Zamri Baseri, said in January that the South American country should boost incentives for energy companies looking to develop oil and gas discoveries.

In December, Petronas signed additional production sharing contracts with Staatsolie for offshore blocks 63 and 64, after winning the areas in a bidding round.

The deal, signed on Monday by Petronas, Exxon and Staatsolie executives, serves as the basis for further negotiations for a gas addendum to the production sharing contract they signed in 2013 for Block 52.

The Sloanea-2 appraisal well, including a production test, will start to be drilled in 2024, Staatsolie said.

"After the Sloanea-2 appraisal well is drilled, it will be determined whether a commercial gas field is feasible. In that case, first gas production would be around 2031 at the earliest," Staatsolie added.

The parties are weighing if a floating liquefied natural gas plant could be a good fit for the project.

(Reporting by Ank Kuipers, writing by Marianna Parraga, editing by Alexander Smith)

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