Reprinted from Caribbean Net News
caribbeannetnews.com

Suriname oil company signs production-sharing contracts with Irish oil producer

Wednesday, February 14, 2007

by: Ivan Cairo
Caribbean Net News Suriname Correspondent
Email: ivan@caribbeannetnews.com

PARAMARIBO, Suriname: Suriname’s state-owned oil company Staatsolie and its subsidiary Paradise Oil on Monday signed production-sharing contracts with Irish oil producer Tullow Oil. Through a joint-venture Paradise Oil and Tullow will execute explorations on the Uitkijk Block and Coronie Block, two on-shore concessions in Suriname owned by Staatsolie.

“It should come as no great surprise that Suriname is an area of interest and an area for growth and opportunity identification by Tullow. With our extensive knowledge, experience and success in West Africa, this area of South America is a logical next step for Tullow and one where we feel we can apply our expertise gained in West Africa,” said John McKenna, Tullow’s Regional Exploration Manager for the Americas and Asia, at the signing ceremony.

Staatsolie manager Marc Waaldijk disclosed that in the first stage of the exploration program Tullow will invest up to US$8.5 million, taking the lager financial risks in the joint-venture. If the operation is successful in finding commercial oil fields, production could start as early as 2011.

According to McKenna, Tullow conducted a technical study of South-America and the company is “very pleased to have gained interests in the area and in Suriname in particular”.

“We look forward to the challenges ahead and to working closely with Staatsolie and Paradise Oil over the coming years and we hope that today will mark the start of a long and successful relationship between Tullow and Staatsolie and Paradise Oil,” he further noted.

For the exploration, development and production of the two concessions by Paradise Oil and Tullow Oil in a joint-venture, Paradise Oil will act as a operator. Tullow Oil will acquire a stake of 40 percent by means of financing the first phase of the agreed exploration drilling programme of approximately US$8.5 million.

After phase 1, all future exploration, development and production costs will be carried jointly by the parties, said Staatsolie-manager Waaldijk. The total duration of these contracts is twenty-five years, counted as from the end of the year in which the development plan of the first commercial field has been approved.

The activities in stage 1 will consist, among others, of drilling exploration wells in the UItkijk Block. This concession is approximately 750 km² wide and is situated at the east of Staatsolie’s lucrative Tambaredjo oil field that is already in production.

The exploration in the Coronie Block will start in July 2007 while the activities in the Coronie Block (2600 km²) are scheduled to commence in the last quarter of this year.

Tullow is currently the largest independent exploration and production company operating in Europe, currently producing almost 75,000 barrels per day and aspires to produce an average of approximately 80,000 barrels per day by the end of the year, said McKenna.

In comparison to 2005, Staatsolie’s oil production in 2006 increased by 10 percent to 4.8 million barrels, resulting in a turnover of approximately US$270 million and an expected profit of US$0.165 million.

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