ExxonMobil, PETRONAS to explore, develop natural gas discovery offshore Suriname
(WO) – State-owned oil and gas company Staatsolie Maatschappij Suriname N.V. signed a Letter of Agreement (LoA) with PETRONAS and ExxonMobil on Monday, March 4, 2024. The LoA is necessary for further exploration of the natural gas discovery made in 2020 with the Sloanea-1 exploration well in Block 52.
PETRONAS made a natural gas discovery in 2020 in Block 52 in the offshore Suriname. This involved a small quantity that was initially seen as commercially unattractive to develop into a production field.
The development of an offshore gas field is more challenging and complex to explore in technical and economical perspective than an offshore oil field. Nevertheless, Staatsolie and PETRONAS have held intensive discussions in recent years to further explore the Sloanea-1 natural gas discovery. These conversations led to the LoA.
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 natural gas field in Block 52.
The LoA serves as a basis for further negotiations for an addition, a so-called 'Gas Addendum', to the production sharing contract (PSC) for Block 52 that was signed in April 2013. The PSC contains detailed provisions for the development of an oil discovery into a production field.
In the event of a natural gas discovery, the PSC prescribes that parties will have to negotiate a 'Gas Addendum'. 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 natural gas discovery and subsequently develop and produce it.
PETRONAS will drill the Sloanea-2 appraisal well starting in April 2024. A production test will also be carried out. The drilling platform is now drilling the Fusaea-1 exploration well in Block 52 and already drilled the first part of the Sloanea-2 well in February.
For PETRONAS and ExxonMobil, the LoA is therefore important to proceed with the Sloanea-2 well. After the Sloanea-2 appraisal well has been drilled, it will be determined whether a commercial gas field is feasible. If so, first natural gas production would be around 2031 at the earliest, taking into account the construction time of the production installations.
A possible commercial natural gas field will be developed via an “FLNG project”. FLNG (Floating Liquefied Natural Gas) means that the gas is extracted from a floating production platform, liquefied and stored for transport by gas tankers.
