Staatsolie, Repsol YPF to Sign E&P Contract in 1Q04

Suriname's state oil firm Staatsolie plans to sign a 30-year exploration and production contract with Spanish oil company Repsol YPF by March 31, 2004 for offshore block 30 in the Guyana basin, Staatsolie exploration and production contracts manager Marny Daal-Vogelland told BNamericas.

The block lies 100km off the coast, covers 18,600 sq. km. and has water depths of 100-1,000m, she said.

Staatsolie and Repsol YPF signed a preliminary agreement on December 16 and a technical study agreement in August 2002. "We just signed a heads of agreement, and the production-sharing contract (PSC) we're going to sign is expected to be ready by the first quarter of 2004," she said.

The exploration stage is for 5-6 years and is divided into three phases. At the end of each one Repsol YPF will have the option to withdraw if results are not promising, Daal-Vogelland said. Minimum investment in the block and the optional drilling program will be decided later.

After signing the PSC, Repsol YPF will acquire 3D seismic data and analyze existing 2D seismic, she said. Drilling would probably not start until 2005 at the earliest.

Staatsolie will retain the option to participate with up to 10% interest in the development phase. Repsol YPF will probably bring one or two partners into the agreement "to share costs and minimize the risks."

Repsol YPF officials were not available Friday to confirm this.

"This is part of our effort to attract investment for the oil industry in Surinam," she said. Staatsolie is currently offering 13 offshore blocks for exploration. More information on the blocks is available at: Staatsolie.

Block 30 is part of a block that was awarded to a consortium of France's Total, Anglo-Dutch Shell, and US-based Burlington Resources in August 1999. However, the consortium withdrew from the block after the first exploration phase in 2001 because the hydrocarbons prospect it identified was too deep to make it commercially viable, Daal-Vogelland said.

"We have had several companies over the past 30 years looking at the acreage in offshore Suriname, but this is a very large area and it is really under-explored - we only have 22 wells in this area, which is larger than the North Sea," Daal-Vogelland said.

The Guyana basin covers 170,000 sq. km. Guyana basin reserves are estimated at 15 billion barrels, but Suriname does not currently have any offshore fields producing oil.

Staatsolie currently produces 12,000 barrels a day (b/d) of crude from its onshore Tambaredjo field, 7,000b/d of which is processed by its refinery while the rest is exported.

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