Source link : https://theamericannews.net/america/suriname/exxonmobil-exits-surinames-block-52/
Exxon Mobil Corp. has transferred its 50 percent stake in Suriname’s Block 52 to partner Petroliam Nasional Bhd. (Petronas), the South American country’s national oil and gas company said, assuring there would be no disruption in activities.
“This withdrawal is part of ExxonMobil’s ongoing evaluation of assets in its global portfolio”, Staatsolie Maatschappij Suriname NV said in a statement online.
“The production sharing contract allows parties to bring in partners to a block or transfer their interests to another party”, it added. “This is common practice in the oil and gas industry. Companies decide to partner in an area or exit based on their global portfolio and risk assessment.
“Staatsolie expects PETRONAS to continue the activities in Block 52 without interruption and is confident in the continuation of the good partnership between the two companies”.
Spanning 4,749 square kilometers (1,833.6 square miles) north of Paramaribo’s coast, Block 52 holds the Sloanea, Roystonea and Fusaea discoveries. Sloanea was announced by Malaysia’s state-owned Petronas on December 11, 2020, as the first discovery in Block 52, followed by Roystonea and Fusaea in 2023 and 2024 respectively.
On March 4, 2024, Staatsolie and the Block 52 partners agreed to further explore the Sloanea area for potential gas production.
“The LoA [letter of agreement] is necessary for further exploration of the gas discovery made in 2020 with the Sloanea-1 exploration well in Block 52”, Staatsolie said in a press release then.
The discovery “involved a small quantity that was initially seen as commercially unattractive to develop into a production field”, Staatsolie said. “The development of an offshore gas field is more challenging and complex to explore in technical and economical perspective than an offshore oil field”.
Nonetheless Petronas and Staatsolie held discussions to further explore Sloanea 1, which have now led to the LOA, Staatsolie said. According to the Staatsolie statement Petronas was to drill the Sloanea 2 appraisal well in April 2024, followed by a production test.
“This LoA is an agreement that broadly sets out the agreements, principles and conditions to further investigate and increase the feasibility of the development of a commercial gas field in Block 52”, Staatsolie said.
“An important part of the feasibility is the guarantee of a tax-free period of ten years from the start of production”, which has been granted in the LOA with the government’s approval, Staatsolie added.
The LOA serves as a basis for further talks for a “gas addendum” to the production sharing contract (PSC) for Block 52, signed April 2013.
“In the event of a gas discovery, the PSC prescribes that parties will have to negotiate a ‘Gas Addendum’”, Staatsolie said. “This addition to the production sharing contract will establish the procedures and conditions under which the Block 52 partners PETRONAS and ExxonMobil can assess the gas discovery and possibly subsequently develop and produce it.
“Because the negotiations for the Gas Addendum can last almost a year, the agreements made so far in the negotiations are recorded in the LoA”.
Petronas plans to start gas production 2031 if Sloanea 2 proves to be a commercial success. An associated floating LNG facility could also be constructed, Staatsolie said.
According to Wood Mackenzie, Sloanea and the Haimara cluster in Guyana’s Stabroek block, where United States oil and gas giant ExxonMobil is the operator with a 45 percent interest, position the two nations as potential cost-competitive exporters of liquefied natural gas (LNG) to the Caribbean and South America, as well as Southeast Asia. Haimara and Sloanea hold an estimated 13 trillion cubic feet of discovered non-associated gas in aggregate, enabling Guyana and Suriname to supply up to 12 million metric tons per annum (MMtpa) of LNG by the next decade, the energy research firm said in an analysis published November 4.
“These sources could deliver this potential LNG supply at a breakeven, excluding shipping and regasification costs, of about US$6/mmbtu (FOB NPV10 breakeven)”, WoodMac said. “The positive economic results are supported by high well productivity and upstream partners experienced in LNG commercialization.
“This comes at a time when the global market still needs 105 mmtpa of pre-final investment decision LNG to fill the supply/demand gap by 2035”.
Amanda Bandeira, WoodMac research analyst for upstream oil and gas in Latin America, said, “US and Qatar LNG dominance is rapidly growing, but there is a supply window in the mid-2030s coming in part from the US President Biden’s pause on approving new US LNG export projects”.
On January 26 the Biden administration announced it was pausing pending permitting decisions on the export of LNG to countries without a free-trade agreement with the U.S. The indefinite moratorium allows the Energy Department to review considerations on the security of domestic supply, local gas prices, environmental impact and climate risks.
“In this environment, Guyana and Suriname can offer a new cost-competitive LNG supply source and serve as regional suppliers, holding shipping costs advantage to address Caribbean and South American demand”, Bandeira added.
“They are also on par with US Gulf and West Africa projects to deliver to the main demand centers in Southeast Asia”.
However, Guyana and Suriname need to provide clear commercial structure and fiscal terms for the projects to realize the countries’ LNG potential, the report said.
“In Suriname, there is still no set terms for non-associated gas developments, but we expect this project to move forward swiftly – with first gas in 2031 – as the government and project partners have agreed to a 10-year tax break”, said Luiz Hayum, WoodMac principal analyst for upstream in Latin America.
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Publish date : 2024-11-24 18:37:00
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Author : theamericannews
Publish date : 2024-11-28 20:08:41
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