What key factors are contributing to Suriname’s attractiveness for hydrocarbons investments?
Suriname provides a stable political climate with democratic values, good governance and respect for human rights. We have an environment of enormous diversity and many nationalities existing in a highly peaceful and tolerant country. There are several languages spoken here, but in a professional context, most people are able to speak and understand English.
Many international players find these factors attractive, and it makes Suriname a good destination for doing business. However, like many other countries, we have our challenges: accessibility is a problem, for example, but that will change as business progresses.
As the world confronts growing inflation and fiscal stress due to the Russia-Ukraine crisis, what are some challenges that must be addressed to ensure energy security for the region?
We can look at the world’s changing energy landscape from a perspective regarding both demand and supply. Regarding demand, Caricom and the Caribbean region as a whole, along with countries such as Mexico, Venezuela, Colombia and Brazil will need to consider this from a long-term perspective. Caricom needs to secure its energy supply, whether that is fossil fuels, renewable energy, or alternative energy forms because depending on fuel from outside the region is an enormous risk. We have seen this occur from the Covid-19 pandemic, but more so because of the war in Ukraine.
Regarding supply, there are suppliers already in the region: Trinidad and Tobago, Guyana, potentially Suriname and possibly some others to come. Guyana and Suriname are the future of oil and gas supply in the Caribbean Basin. Geopolitically, this means a lot for us with the United States being close by as a market, as well as other countries in the world that need to de-risk their energy supply.
Europe now needs to de-risk its energy security instead of being dependent on 40-50% of its gas coming from Russia. Recent events have resulted in an expensive lesson learned for Europe and it is prompting a change in strategy. This lesson has already been learned in food security. Just as no one wants to depend on one country for their food supply, the same will go for oil and gas.
Another factor we need to look at if we want to have energy security is energy sovereignty. That means having complete control over your energy resources for the purpose of domestic use. The world is changing because of the war in Ukraine and for us, this is an opportunity because while oil and gas was previously expected to be used only until around 2035, because of the war it is now expected to be in use until about 2045. However, although the period is extended, it remains relatively short as we are coming to the end of the oil and gas industry.
We believe that Trinidad and Tobago provides some opportunities to collaborate. We need to have good strategic discussions because these are not short-term commitments. It has to be a multi-year, even decades-long commitment if you want results and long-term sustainability. That means a political commitment that extends beyond the terms of governments. This is a challenge we face: how to create the conditions for a commitment lasting 20-30 years.
How important are relationships with Trinidad and Tobago and other Caricom nations in the development of Suriname’s oil and gas sector?
Our focus right now is to benefit from the knowledge, expertise, capabilities and installed capacity in Trinidad’s oil and gas sector. However, when we speak about the development of a hydrocarbons sector in our country, our view is that the whole region should benefit from the oil and gas opportunities in Suriname.
That means for us, local content is not only restricted to Suriname, but is seen through the lens of the region on the whole. This needs to be symbiotic for functional reasons as well as reasons regarding the nature of co-operation and integration within the region. It is a strategic objective of this government and so we are in discussions with Guyana, Trinidad, Barbados and countries further afield. We are in discussions with Brazil to expand opportunities for gas and energy supply to the northern part of that country. This is a wider orientation than just Suriname alone.
How is Suriname navigating the energy transition while aiming to monetise oil and gas resources?
In Suriname, we will need to make sure that we comply with internationally endorsed standards of oil and gas exploitation. This is critically important because Suriname is already a carbon-negative country, and we have made a commitment internationally to remain carbon negative. We need to make sure that whatever oil and gas we exploit will be delivered with the highest environmental standards.
Our vision for Suriname is to look at petroleum not as the endgame for our energy security, but as a transition to a sustainable energy mix. We have started this transition already because of our environmental commitments. Our domestic energy supply for electricity is already 50% carbon free. The goal for the region is to focus on developing sustainable sources of energy.
What role, then, do oil and gas resources play in Suriname’s development?
For Suriname, oil and gas will be a stepping stone that finances a transition. Currently, the main economic sectors that provide our resources and revenues are mining, agriculture, fisheries and tourism. In the future, oil and gas and the manufacturing industry that emanates from them will be on that list.
That is another strategic objective of ours: to develop a conglomerate of industries around affordable gas that can be brought onshore. That will be focused in the western part of the country, where there are bauxite deposits, and it could be a project that we undertake in collaboration with Guyana.
Oil and gas and mining will not be around permanently, so our Vision 2060 targets an economy that is at least 80% non-carbon. By then, our economy will be different, but to make it different we will need the resources that will come from an oil and gas industry. Suriname is geographically well located to be a supply chain for the region. An oil and gas industry will require ports to be set up, and in the future those ports will need to be repurposed for the various sectors of the economy that they will serve.
We recognise the environmental risks involved and the rules that come along with it, but we do not want to be discriminated against by unfair barriers in terms of production. There are now carbon taxes that become a factor when new players enter the market.
We need to avoid the double standards but we have to also recognise that of today’s carbon emissions, almost 90% come from those same economies that were built on carbon fuels. We expect them to be fair and honest about this and to invest much more in reducing carbon emissions than they expect us to. As a carbon-negative country, we are taking up emissions produced by other territories. A full 93% of our country is forested, so we are producing less carbon dioxide than the carbon dioxide we take in.
Additionally, we are producing oxygen from our rainforests, which of course does not remain within the borders of Suriname. We’re doing a favour to the world by remaining carbon negative. We can aim to be carbon neutral, but we are already going beyond that. So let’s be fair in the debate about oil and gas and carbon credits.
What would be your final message to energy executives and other investors considering opportunities in Suriname?
I would suggest coming to Suriname now rather than waiting and being the last in business. Don’t wait until everything is perfectly well arranged, because then you will be the last, and by that time, all the business will be done. Also, if you enter a situation where not everything is put together as yet, because of your trust and confidence, the country will provide a so-called “loyalty bonus.” We will continue trusting and believing in those businesses. Secondly, do not only look at oil and gas, because there are many more opportunities.