Suriname continues to discover vast amounts of oil leading to potentially massive revenue

Happy Monday!

This week the country is awash by strikes again, in Suriname’s Energy Company, and Suriname continues to discover more oil reserves leading to potential massive revenues.

Suriname’s electricity company, the Energie Bedrijven Suriname (EBS) was rocked by strikes this week as the union’s president was fired.

• Energy Companies Suriname (EBS) held an urgent meeting following the dismissal of their president, Marciano Hellings.

• Hellings was accused of taking and sharing photos of company information and sharing them with his twin brother. His twin brother, Raoul, posted on Facebook that the CEO of EBS received a $100,000 car as a gift and the company’s CTO also spent $6,000 on car modifications.

• Hellings denied taking the photos and claimed his brother had other sources from which they got their information.

The firing received a lot of critiques and led to disagreements between employees and various trade unions.

• The Union of Assertive Trade Unions (U.v.A.V.) expressed dismay over the firing of Hellings and viewed it as an attempt to silence union leaders and an attack on worker’s rights.

• The union federation emphasized the importance of union leaders being able to advocate for workers without fear of repercussions and vowed to seek national and international support to address this issue and demand justice.

• They called on all unions and organizations to join their fight for fair working conditions and workers' rights.

• The company has since ordered union members to return to work and warned there would be disciplinary measures.

• While the union ended the strike, they continued to meet with members, presented a motion to Assembly Chairman Marinus Bee demanding the reinstatement of their president, Marciano Hellings, and expressed no confidence in the management.

• The union assured that there would be no power outages and urged members not to be intimidated by management's threats, emphasizing their right to attend union activities.

The company has also come under pressure from the government via the IMF.

• The government, pressured by the IMF, is aggressively reforming subsidies at Energy Companies Suriname (EBS) but is avoiding necessary operational reforms.

• The latest scandal highlights management’s disregard for the company’s financial concerns. The scandal brings to bear prior issues with the director Leo Brunswijk.

• Despite increased electricity rates for the public, there are no signs that EBS is cutting costs or managing finances frugally.

• There have been concerns and arguments that politicization leads to unprofitable operations.

The Court’s orders and resumption of work.

• The court has since ordered the union to resume work, but despite formally ending the strike, members have not returned to work.

• They presented their motion to Vice President Ronnie Brunswijk, who stated he would handle the matter impartially, despite his brother being the general director of EBS.

• The union members have agreed to return to work if the firing of Hellings is reversed.

• Leo Brunswijk, CEO of Energy Companies Suriname, stands by Marciano Hellings's dismissal, citing conduct breaches.

• Brunswijk refuses to accept apologies and insists on upholding disciplinary actions.

• Despite court rulings in favor of management, union members perceive bias and stand firmly behind Hellings. And so discussions are ongoing regarding future steps.

Suriname’s expected oil reserves continue to grow.

• The oil development in Suriname is expected to significantly impact the country's economy, with estimates suggesting that the government could earn $7 billion in the first five years of production.

• This revenue is contingent on various factors, including Staatsolie's investment of $1.8 billion and TotalEnergies' approval of the final investment decision.

• Revenue sources include royalties, Staatsolie contributions, oil profits, and income tax from TotalEnergies and APA Corporation.

• Additionally, Staatsolie's participation would cover a portion of costs and entitle it to a share of oil profits.

• Overall, the government stands to benefit substantially from Suriname's oil reserves, potentially exceeding revenue projections if oil prices remain high.

Oil Reserves now exceed 2.4 billion barrels.

• Suriname's oil reserves now exceed 2.4 billion barrels, with over 12.5 trillion cubic feet of gas. The overall total oil equivalent is around 4.6 billion barrels of oil.

• Petronas' discoveries in two blocks are nearly 400 million barrels, potentially leading to the country's first sanctioned development with an FPSO (floating production storage and offloading) vessel.

• Suriname is also leveraging Petronas' LNG (liquified natural gas) expertise while balancing its LNG-weighted portfolio with oil.

• TotalEnergies and APA Corp approach approval for an FPSO development in Block 58.

• The Stabroek region continues to be extremely highly valuable with Guyana’s Stabroek block's 10 FPSO development being valued at over $150 billion, with Exxon Mobil Corp recently approving the sixth FPSO.