Annand Jagesar, CEO of Staatsolie Maatschappij Suriname, talks to The Energy Year about Suriname’s plans for growing its oil and gas sector while remaining a carbon-negative country and Staatsolie’s key role and recent successes in these efforts. Staatsolie is Suriname’s national energy company.
What would you highlight as key successes for Staatsolie and Suriname in recent years?
For 40 years we have been producing oil onshore and running an integrated energy company successfully and profitably. In December 2019, we found oil offshore, followed by more in 2020, which is a game changer. Our company’s current production is 17,000 bopd and our first offshore development in Block 58 is expected to reach 200,000 bopd. This refers to the development by TotalEnergies as operator of the Sapakara and Krabdagu discoveries in the eastern part of the block. That is a multiple of what we produce today, so that’s a very important part of the business that will change.
There is a pressure that comes with the conversation around climate change though, and we acknowledge that. Our company is also looking at ways to produce clean energy. We operate the Afobaka hydropower facility, which produces very clean electricity, and we are planning to expand into solar-generated power.
Furthermore, the oil we can produce offshore has a relatively good CO2 footprint (around 15 kg of CO2 per barrel of oil produced) compared to oil production elsewhere in the world. As part of the effort to minimise CO2 production in the offshore operations, continuous flaring is banned with most of the produced associated gas being reinjected and the remainder being used for energy generation needed for the offshore operations.
Suriname is a carbon-negative country and intends to remain as such.
What is your mandate in supporting the growth of the oil and gas sector?
We have a large mandate because we operate under the “Malaysian model,” whereby the commercial company is placed under the regulator, which is Staatsolie. Thus, we do everything on behalf of the government.
One of our chief concerns is how we will maintain a low carbon footprint in our oil production. As Staatsolie, we have a zero-flaring policy and the offshore companies operating here right now also have strict flaring policies. In addition, their operations’ emissions are decreasing.
We now have a special role in local content development. For instance, we are very proud that Shell recently drilled a well offshore operated from Suriname, with many services provided out of Suriname (F&B, hospitality, drilling fluids, fuel, logistics services and specialist offshore labour). Shell indicated that the service was at an excellent level, and with this we proved to the world that we can provide services at quality levels demanded by major international oil companies.
Our position is that it is more about the knowledge transfer to local content to make them competitive. Guyana, for example, focused on equity and mandated that 51% of a local company must be owned by Guyanese citizens. However, even if a company is owned by Guyanese citizens, it can still outsource everything to a foreign company. For us, it’s important that the sum of the local content generation is maximised.
Looking at the PSCs Staatsolie signed with TotalEnergies and QatarEnergy for blocks 6 and 8, how is Suriname managing and delegating blocks to ensure ongoing production?
We want to keep as much acreage as possible under contract. If a block is relinquished, we try to put it under contract again as soon as possible. And of course, we are mindful that not all the acreage will have oil. We have prolific areas, so we try to study and re-study them every time new data becomes available to come to an integrated view of the offshore. It is key that we have a national oil company – we have a lot of geoscientists that are looking at the data and trying to upgrade it so that more companies develop an interest in taking up these contracts. This is our so-called “masters of the basin” approach.
How do you see Suriname integrating and collaborating as an oil and gas nation within the region?
Firstly, we are a part of Caricom, where there is free movement of people, goods and services. We have to be aware of that because it means competition. If a service can be provided more competitively from Trinidad, then according to the Caricom rules it should come from Trinidad. We are being approached by several nations in Caricom for collaboration and are open to looking into that if it works to our mutual benefit. With Trinidad and Tobago, we have an MoU on gas co-operation and of course Guyana is of key interest as well as we border them directly. We have a historical good relationship with Guyana.
What projects or developments are you currently discussing to continue decarbonising operations in the country?
We used to flare gas in our production fields but now we use it in our heaters at our treatment plant where the oil is heated to remove impurities and water. Using gas that would otherwise have been flared reduces our emissions. This is just one of our successful projects. It sounds a little strange, but the bigger polluter is not the production field, but the refinery and power plant that are burning oil to operate. Burning oil produces a lot of emissions.
We were flaring hydrogen-rich off-gases at the Tout Lui Faut refinery, but we’re using that now to make hydrogen, which has also helped to reduce our emissions. In our power plant we are burning oil to generate electricity so we are now looking at how we can work on that to reduce emissions. We are now planning a 30-MW solar project.
Our concerns involve making our operations more efficient to reduce their emissions. We will develop sustainable energy using sources such as solar, and in the future, perhaps wind. And where this is not possible we will compensate with nature-based solutions. This is our role: we are an energy company, not only focused on oil and gas. The consumer wants energy and is increasingly going to want it from a clean source. If we want to survive as a company, we have to transition to providing clean energy.
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