TotalEnergies Starts Pre-design for Development Block 58 Oil Field

Staatsolie release

TotalEnergies has announced the start of pre-design studies for the development of the first production field in Block 58 in offshore Surinamese. A final investment decision (FID) is expected in the fourth quarter of 2024. The development of the first oil field will cost a total of approximately US$9 billion.

Patrick Pouyanné, Chairman and Chief Executive Officer of TotalEnergies, visited Suriname today to inform President Chandrikapersad Santokhi and the Board of Executive Directors of Staatsolie about the further steps in Block 58. The announcement of the pre-design phase follows a meeting between Pouyanné and President Santokhi and Annand Jagesar, Managing Director of Staatsolie Maatschappij Suriname N.V.

TotalEnergies, the operator, has a partnership with APA Corporation in Block 58, each with a fifty percent interest. Together they have drilled fourteen wells in this block. The last well, Krabdagu-3, closed the delineation program in August this year. That program involved the evaluation of the two main oil discoveries in Block 58, Sapakara South and Krabdagu, and confirmed reserves of approximately 700 million barrels in both discoveries combined. This volume is sufficient for a combined development of the two fields. In the pre-design phase (pre-Front End Engineering Design, pre-FEED), the selected concept of the project is further developed. At the end of 2023 - after completion of the pre-FEED - the Front End Engineering Design will start, during which the pre-design will be refined into a basic design. The FID is expected in the fourth quarter of 2024. The development of the fields will be entirely focused on oil. In total, approximately US$ 9 billion will be invested.

The concept for the development of the production field is based on a floating production and storage facility (FPSO) with a production capacity of 200,000 barrels of oil per day, connected to a subsea network at a water depth of one hundred to one thousand meters. The design will aim for a minimal environmental footprint through low greenhouse gas emissions.

After the FID, the subsea installations will be constructed, the FPSO will be built, and production wells will be drilled. At FID it will be indicated when the first oil will be produced, expected in 2028.

Managing Director Annand Jagesar welcomes Pouyanné's visit. He said TotalEnergies has always proven itself to be a reliable and respectful partner. The visit is the result of a commitment by Pouyanné to visit Suriname as soon as TotalEnergies had identified sufficient volumes for the development of a production field. “Based on the current situation, it is only a matter of time before revenues will come from the offshore oil and gas industry. Staatsolie remains committed to further developing this industry and is committed to securing Suriname’s long-term prosperity. We expect that future income from the offshore will be well spent, including by contributing to the prosperity and stability fund and developing sustainable sectors such as agriculture and tourism.”

Patrick Pouyanné is looking forward to achieving great heights together with Staatsolie and Suriname. He noted that the announcement of the preliminary studies is an important step for the joint development of Suriname's natural resources.

Staatsolie has the option to participate with a maximum of twenty percent in the development of the first field in Block 58. As stated in the production sharing contract, the state of Suriname will receive the largest share of the net income from the offshore. This will come from royalties, profit oil and taxes and is expected to amount to between US$ 16 and US$ 26 billion over the lifespan of approximately twenty years of the production field and depends on the oil price. In addition to the direct contributions to the state treasury included in the contract, there will also be indirect income from the provision of local goods and services (local content). During the drilling of the last five wells in Block 58, all operational activities took place from Suriname. Approximately US$ 90 million has flowed into the Surinamese economy due to, among other things, the purchase of local labor, goods and services. To develop the first offshore production field, approximately thirty wells will have to be drilled over 2.5 years. This will have a huge spin-off for the Surinamese economy.