Suriname's state oil company aims to beat its 2011 record profit
Suriname’s state oil company Staatsolie broke a new record last year, bringing in some US$700 million in income, over US$560 million more than 2008.
“2011 was our best year ever, if we look at turnover,” Managing Director Marc Waaldijk says. “World oil prices have turned out profitable, in particular in the last couple of years, even though production levels have remained the same for us. That’s a strategic choice though. We want to be sure of the reserves; only then can we look at producing bigger quantities.”
Staatsolie Maatschappij Suriname N.V. was founded in December 1980 and is involved in all aspects of exploration, production, refining and marketing of crude oil and refined products. The company is now one of Suriname’s biggest earners and has been contributing towards the development of the country for more than 30 years, thanks to forward-thinking management.
In 2011 the company invested US$190 million in exploration, expansion and diversification efforts. “Staatsolie must expand beyond oil production,” says Mr. Waaldijk. “Half way through the 2008-2012 planning, we evaluated the program to find out whether Vision 2020 was still valid and if adjustment was necessary. The findings of the evaluation were that we are right on track.”
Knowing that oil reserves cannot last forever, Staatsolie is investing in the development of renewable energy programs. “Every self-respecting oil company in the world has shifted from oil to energy,” Mr. Waaldijk says. “Depending on the country, the focus is on wind energy, solar energy, biofuel or hydro energy. Everybody is in renewables. We have to follow suit if we want Staatsolie to survive. Oil is finite, but renewables are infinite.”
Today, Staatsolie produces 16,000 barrels of crude oil per day, and has a refining capacity of 7,000 barrels per day producing diesel, fuel oil and bitumen. Its thermal power plant added 14 megawatts in 2010 to produce 28 megawatts.
2011 was our best year ever. If you look at turnover, world oil prices have turned out profitable, in particular in the last couple of years, even while production levels remained the same.
CEO of Staatsolie
Currently, the company manages three oil fields in Suriname: Calcutta Field, Tambaredjo Field, and Tambaredjo North West Field in district Saramacca. The output from the three oil fields is then transported through giant underground pipes to a refinery located at Tout Lui Faut with a capacity of 7,000 bpd.
Staatsolie has steadily made investments that will affect each of these functions. Its US$450 million budget for 2011 allocated US$85 million for operations and US$370 million for investments. Its exploration budget was bolstered by an additional US$50 million to expand its oil reserves to 64 million barrels and maintain its 16,000-barrels-per-day production levels. Though still early in the Vision 2020 program, this task has proved to be Staatsolie’s most daunting undertaking.
“We want to maintain a production level of 16,000 barrels per day, and that will require an extensive drilling program,” Mr. Waaldijk says. “Many do not seem to understand that maintaining a certain production level requires enormous investments.”
As Staatsolie aggressively moves forward with its 2020 plan, Mr. Waaldijk reflects on the program’s early victories and disappointments. He admits there is much more to be done in the next nine years. “At Staatsolie we have always worked according to plans, but these were relatively short-term plans,” he says. “We have boldly set a long-term goal for 2020. It is not easy, but because the goal is divided in phases, planning periods, it is manageable. It is just like taking the stairs, one step at a time.”
This year the company has signed exploration contracts with two multinationals, the most recent with Texan oil and gas firm Kosmos Energy, which agreed to explore two blocks offshore Suriname. Blocks 42 and 45 cover a total area of nearly 3 million gross acres, in water depths of between 650 and 8,500 feet.
Staatsolie has the ability to brand Suriname as the next regional oil and gas giant. By reaching out to its neighbors it can attract investment and raise awareness from the many Latin American companies active in the oil and gas industry. Staatsolie would like to send a message about how it is open to partnerships, and how it has already established some partnerships with leading companies like Kosmos and Murphys.