Apache PSC Hints At Growing Ahead Of Licensing Round

BMI View: Suriname ' s offshore potential has attracted much interest over the past few years. Following recent deals, such as the exploration contracts signed between Staatsolie and Apache Corp for block 53, we expect the interest to be even greater during the next licensing round - due to open in 2013.

Interest in S uriname ' s offs hore potential could create stiff competition between bidders during the upcoming 2013 licensing round. Several international oil companies ( IOCs ) have already shown significant interest in gaining exposure to Surinamese coast al waters during the previous rounds . Tullow Oil and Statoil are farm-in partner s on one block ; Kosmos Energy and Chevron own rights to two blocks and Murphy Oil has also been allocated two blocks .

Estimated Undiscovered Resources in Offshore Portions
F95 F50 F5 Mean
Note: F95, F50 and F5 represent respectively a 95, 50 and 5 percent probability of at least the amount noted. Source: USGS
Oil (million bbl) 2 , 323 11 , 850 27 , 812 2 , 966
Gas (bcm) 164.1 4 877.8 3 2 , 294.32 1 , 003.1 6
NGL (million bbl) 304 1 , 690 4 , 754 1 , 988

So far, while no oil has been discovered offshore, the Zaedyus discovery in French Guiana (made in 2011) led many to anticipate that Suriname would hold comparable resources (see our online service, September 9 2011, 'Tullow's Zaedyus Hit Lends Weight To Continental Drift Strategy'). Similarly, discoveries in the Liberia basin, linked to Surinamese coastal plays via the continental drift theory, could foster interest in the area. The US Geological Survey (USGS) conducted estimates of resources in the Suriname-Guyana basin in 2000 and ranked it as second most promising unexplored offshore area at that time.

Suriname is preparing a fifth licensing round. The round is to open for applications between Q113 and Q313, and allocations will be announced in the fourth quarter. The four blocks to be awarded are situated in the Demerara Plateau where state owned company, Staatsolie, performed 2D seismic surveys between December 2011 and September 2012. The results of the surveys are to be announced before the beginning of the round, in late 2012.

Newcomer to the Suriname-Guyana basin, US listed Apache Corp signed a production sharing agreement (PSC) with national oil company (NOC) Staatsolie on October 18. The IOC agreed to invest US$230mn in the exploration phase at block 53, 130km north-west of Paramaribo. At least two wells are to be drilled and 3D seismic research will be conducted. Apache adopted the strategy of assuming exploration costs in expectation of receiving payment in the form of subsequent production. A total of 22 companies were competing for this contract.

Although exploration of Surinamese offshore acreage has not yet proven successful - expectations are high that commercially recoverable resources could be found, particularly promising is Kosmos Energy's assertion that the same offshore petroleum system located in French Guiana extends to adjacent Suriname. Consequently, we expect major IOCs to show significant interest in the upcoming bidding round.

This article is tagged to:
Sector: Oil & Gas
Geography: Suriname

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