Are New Oil Finds a Game Changer for Suriname?
Houston-based Apache and France’s Total have discovered “significant” deposits of oil off the coast of Suriname, the companies announced Jan. 7, spurring investor excitement that it could be the area’s second large find in recent years following ExxonMobil’s discovery of oil deposits off the coast of Guyana. How important is the announced oil find in Suriname, and what does it mean for the South American country? Is it too early for realistic comparisons with Guyana, or is investors’ enthusiasm justified? What needs to be done for Suriname’s citizens to see the benefits of oil discoveries in their territory?
Steven Debipersad, lecturer and researcher at the Anton de Kom University of Suriname: “Although state oil company Staatsolie has been producing oil from small onshore wells on a modest scale since 1982, the future will soon look different with this new offshore find. The news came at a time of increasing government debt concerns. Even before the end of the year, debt was further aggravated with a new $125 million government bond, enabling the government to take over the hydropower dam from Alcoa. Suriname’s economy is poorly diversified, with a central role for the gold sector, making it very sensitive to price and production shocks. A previous negative price shock caused a deep recession in 2015-2016, of which the country has not yet fully recovered. The expected growth for this year is just above 2 percent, with the gold sector as the main driver. The main concerns now are the government’s finances, with significant deficits arising as a result of excessive spending, which necessitates structural dependence on foreign loans. As a result, the national debt has…”Read More
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