By Kemol King and Marianna Parraga
GEORGETOWN (Reuters) – Suriname’s Staatsolie needs to secure an unprecedented $1.5 billion in bank financing this year to ensure it can participate in the country’s Gran Morgu energy project, the head of the state-owned company told Reuters.
The project, led by TotalEnergies, is Suriname’s first major offshore project. The country has discovered reserves that may allow it to compete with neighbor Guyana as a prominent offshore crude- and gas-producing country once it sees the first oil in 2028.
Staatsolie wants to partner with TotalEnergies and APA Corp in the project, to be developed at Block 58, which received a positive final investment decision in October.
“We are talking to big banks in the world to finance,” Staatsolie’s managing director, Annand Jagesar, told Reuters in an interview on the sidelines of an industry conference in Guyana. “They’re very eager to do it.”
He did not disclose the potential financiers.
The oil and gas development is expected to cost about $12.2 billion in real terms. Staatsolie’s share in Gran Morgu would require $2.4 billion.
The project’s development, which Jagesar said is 10% complete after a set of initial contracts worth up to $7 billion were secured, will need major investments from all partners.
Staatsolie already paid $175 million of its own cash, with another payment deadline coming up this year. The company has also issued bonds to cover a portion of the capital requirement.
For Staatsolie, this participation represents a first step towards the challenge of doubling the size of the company.
“To participate and to learn from the big boys, that fits perfectly in our strategy,” Jagesar told Reuters.
RAPID GROWTH
The company sees its revenue almost tripling by 2029 to $1.77 billion, according to a company prospectus issued when it launched its most recent bonds.
The biggest challenge for the company is raising cash soon enough to participate in big-ticket offshore projects.
The state company may need to raise even more money in coming years if it decides to participate in a natural gas project to be operated by Malaysia’s Petronas, which is expected to have a final investment decision next year.
Jagesar said it is Staatsolie’s intention to participate in Petronas’ Block 52, which could be the South American country’s first development completely focused on natural gas.
Development of Block 52 could cost some $10 billion, with a potential 2031 start date, according to consultancy Wood Mackenzie. Staatsolie would have to raise another $2 billion to secure its 20% stake.
