🌎 Santokhi makes it to COP 29

Happy Monday!

This week we cover news from COP 29 in Azerbaijan and Suriname’s positions. We also cover Suriname’s progress with the IMF and its recovery. Lastly, we cover the impact that the Liquid Natural Gas (LNG) industry can have on both Suriname and Guyana.

President Santokhi has arrived in Azerbaijan for COP 29.

President Chan Santokhi of Suriname arrived in Azerbaijan to attend the 29th UN Conference on Climate Change (COP29). He will present Suriname’s stance on climate change impacts and advocate for forest and biodiversity conservation. Suriname, one of only three carbon-negative nations, is aiming to take an active role in global environmental preservation.

Several prominent world leaders from major economies are notably absent from COP29. U.S. President Joe Biden will not attend following Donald Trump’s recent electoral victory, as Trump holds contrasting views on climate policy. Other notable absences include Dutch Prime Minister Dick Schoof, German Chancellor Olaf Scholz, and French President Emmanuel Macron, as well as IMF head Kristalina Georgieva. As many other leaders are also absent, there is a notable gap in representation from many global powers.

President Santokhi met with President Ilham Aliyev to discuss collaboration between the two countries.

In a meeting with Surinamese President Chan Santokhi, Azerbaijani President Ilham Aliyev expressed his commitment to supporting Surinamese students through a scholarship program focused on oil and gas studies. Azerbaijan also showed interest in investing in Suriname’s agribusiness sector. Talks between Suriname’s Staatsolie and Azerbaijan's national oil company SOCAR will be organized to explore possible partnerships.

The meeting took place during Santokhi’s visit to Azerbaijan for COP29, with Surinamese Foreign Minister Albert Ramdin and Minister of Spatial Planning and Environment Marciano Dasai also attending. Suriname and Azerbaijan established diplomatic ties 24 years ago, and cooperation has since expanded across multiple sectors.

Santokhi highlighted Suriname’s pivotal moment in offshore oil development while emphasizing its commitment to maintaining its status as a forested and carbon-negative nation. President Aliyev noted Azerbaijan’s extensive experience in offshore oil production and offered to share expertise in energy, agriculture, and education.

Both leaders agreed to use this meeting as a foundation to strengthen bilateral relations, aiming to sign two agreements soon to formalize cooperation. Minister Ramdin and his Azerbaijani counterpart will follow up to advance these plans.

Suriname and the IMF’s collaboration continues to be successful in the country.

The IMF program in Suriname is set to conclude in a little over four months, with a new focus on the nation’s long-term future. Key areas include strengthening governance, and according to the IMF delegation leader Anastasia Guscina, the program’s progress in Suriname has been positive. Economic stability, rising growth, declining inflation, and increased investor interest indicate an improving economy, though challenges remain.

The IMF team recently met with President Chan Santokhi to discuss the program's eighth review, emphasizing post-oil investment development. This includes ensuring that expected oil revenues from 2028 will benefit the public. Santokhi highlighted Suriname's promising future in oil and gas and plans to manage these resources according to international standards. He outlined the establishment of a Sovereign Wealth Fund to manage oil income responsibly, support green energy transition, benefit future generations, and drive economic diversification.

Suriname anticipates a favorable IMF assessment in December. Supported by international partners such as the Inter-American Development Bank (IDB), the World Bank, and the Caribbean Development Bank, the recovery program focuses on debt restructuring and key economic reforms. This cooperation with the IMF is crucial in restoring confidence among international creditors and partners, aiming for sustainable financial stability. Santokhi expressed confidence that Suriname will complete the upcoming IMF reviews, building on the achievements of previous assessments.

Suriname and Guyana are expected to supply 12 million metric tons of liquid natural gas (LNG) over the next decade.

A recent report by Wood Mackenzie projects that Guyana and Suriname could jointly supply 12 million metric tons of liquefied natural gas (LNG) annually over the next decade at competitive prices. Demand for LNG is expected to increase by the end of the decade as industries transition from coal to gas, which could reduce greenhouse gas emissions by up to 50%.

Guyana and Suriname have become hotspots for oil and gas exploration, attracting major investments from companies like Exxon Mobil and TotalEnergies. Suriname’s offshore Block 52 and Guyana’s offshore Haimara cluster hold an estimated 13 trillion cubic feet (tcf) of non-associated gas, which does not contain recoverable oil and could be produced at a break-even price of $6 per million British thermal units.

These projects could help meet a projected global shortfall of 105 million metric tons of LNG by 2035. While U.S. and Qatari LNG production is expanding, a supply gap is anticipated in the mid-2030s, partly due to a pause in U.S. approvals for new LNG exports under President Joe Biden. However, questions remain about the projects' commercial structures and fiscal terms, meaning these developments are not yet fully assured.

Suriname’s Central Bank Governor and the Finance Minister began the introduction of measures for addressing the Surinamese dollar (SRD).

Suriname’s Central Bank Governor Maurice Roemer and Finance Minister Stanley Raghoebarsing have introduced measures to address the devaluation of the Surinamese dollar (SRD). They attribute the currency’s recent decline to exporters failing to deposit the required 35% of foreign earnings in local banks, which has disrupted currency availability for importers. To enforce compliance, authorities have sent notices to non-compliant exporters, with some cases escalated to the Attorney General.

The U.S. dollar exchange rate has surged from SRD 28 to over SRD 35 since September, despite stable monetary policy. Roemer emphasized that banks and currency exchanges should limit rate deviations to maintain realistic prices. Additionally, the government will increase oversight of gold exports to help stabilize the currency.