TotalEnergies, APA greenlight $10.5 billion oil and gas project in Suriname

France's TotalEnergies and U.S. APA Corp on Tuesday announced a positive investment decision for Suriname's most promising oil and gas project, Block 58, which is expected to inaugurate the nation's offshore output.

TotalEnergies expects to begin output at the $10.5 billion project in the first half of 2028. Reuters on Monday disclosed the agreement for the financial greenlight.

The small South American country wants to follow in the footsteps of neighboring Guyana, where a consortium led by Exxon Mobil has discovered more than 11 billion barrels of recoverable oil and gas resources.

Suriname is working to secure comparatively larger revenues through a legal framework including higher royalties and taxes, and signing bonuses that plan to be reinvested in healthcare and local content.

The announcement was made at Suriname's presidential cabinet in presence of President Chan Santokhi, TotalEnergies' CEO Patrick Pouyanne, APA's CEO John Christmann and the CEO of Suriname's state energy company Staatsolie, Annand Jagesar.

"Our policy, and that will go for any government, is aiming to raise the standard of living for our population will be significantly higher," Santokhi said.

FAST-TRACK

TotalEnergies and APA plan to develop the Sapakara and Krabdagu fields, renamed as "Gran Morgu", with combined recoverable resources estimated above 700 million barrels.

"We are very proud of it," Pouyanne said of the velocity of the development, which took only one year from the completion of well appraisal to the final investment decision (FID).

A Floating Production Storage and Offloading (FPSO) facility being built in Asia for the project, with a 200,000-barrel-per-day capacity, is expected to be one of the company's largest, Pouyanne said. That contract, along with others including energy infrastructure builders SBM Offshore and Saipem, represent a total of $7 billion, he added.

A total of 32 new wells will be drilled as part of a field development plan approved and signed by TotalEnergies and APA on Tuesday, the companies said.

TotalEnergies, the project's operator, plans to recover about $1.4 billion spent in exploration in the area since 2019.

Staatsolie, which has been raising funds to participate with a 20%-stake in the project, secured a first $175 million payment and is now in talks with banks and planning a bond offer to complete a second payment, CEO Jagesar said.

Pouyanne said a deadline for Staatsolie to complete its investment commitment could be extended through December next year if necessary.

APA's CEO Christmann underlined the geologic potential in the Atlantic Margin's deep waters, which has resulted in large discoveries in Guyana, Suriname and Brazil.

"FID is a point of no return," Jagesar said. "Suriname will never be the same."