Petronas, ExxonMobil Make Third Discovery in Suriname's Block 52

Petroliam Nasional Bhd. (Petronas) has declared a third hydrocarbon discovery in Suriname’s offshore Block 52, a 50-50 co-venture with Exxon Mobil Corp.

The Fusaea 1 exploration well, spudded February, was drilled to a total depth of 5,227 meters (17,149 feet), revealing “several oil and gas-bearing Campanian sandstone reservoir packages”, the Malaysian state-owned oil and gas company said in a statement. “Further evaluation is being undertaken to determine the full extent of this discovery and its potential for an integrated development with the recent Roystonea-1 and Sloanea-1 discoveries”.

Petronas vice president for exploration Mohd Redhani Abdul Rahman said, “The success of Fusaea-1 is a testament to the advancements in our geological comprehension of this region, bolstered by recent breakthrough in Roystonea-1 and Sloanea-1”.

“These discoveries have significantly expanded the prospectivity and integrated oil and gas development potential within Block 52”, Mohd Redhani added.

“In pursuit of sustainable and high-value material resource, PETRONAS remains committed in its exploration activities in selected focus regions as part of its portfolio rationalization efforts.”

Located in the Suriname-Guyana basin, Block 52 spans 4,749 square kilometers (1,833.6 square miles), according to the owners. It sits north of the coast of Paramaribo, Suriname’s capital. Petronas Suriname E&P BV is the operator of Block 52 while ExxonMobil Exploration and Production Suriname BV holds the other half.

Gas Development Agreement

Kuala Lumpur-based Petronas announced its first Block 52 discovery on December 11, 2020, through the Sloanea 1 well, making Block 52 its first exploration success in the South American country. The well yielded “several hydrocarbon-bearing sandstone packages with good reservoir qualities in the Campanian section”, Petronas said in a press release at the time.

Last month Suriname’s national oil and gas company Staatsolie Maatschappij Suriname NV said the Block 52 partners agreed to further explore the Sloanea area for potential gas production.

“The LoA [letter of agreement] is necessary for further exploration of the gas discovery made in 2020 with the Sloanea-1 exploration well in Block 52”, Staatsolie Maatschappij Suriname NV said in a news release March 4.

The discovery “involved a small quantity that was initially seen as commercially unattractive to develop into a production field”, Staatsolie said. “The development of an offshore gas field is more challenging and complex to explore in technical and economical perspective than an offshore oil field”.

Nonetheless Petronas and Staatsolie held discussions to further explore Sloanea 1, which have now led to the LOA, Staatsolie said. According to the Staatsolie statement Petronas was to drill the Sloanea 2 appraisal well starting April 2024, followed by a production test.

“This LoA is an agreement that broadly sets out the agreements, principles and conditions to further investigate and increase the feasibility of the development of a commercial gas field in Block 52”, Staatsolie said.

“An important part of the feasibility is the guarantee of a tax-free period of ten years from the start of production”, which has been granted in the LOA with the approval of the government, Staatsolie added.

The LOA serves as a basis for further talks for a gas addendum to the production sharing contract (PSC) for Block 52, which was signed April 2013.

“In the event of a gas discovery, the PSC prescribes that parties will have to negotiate a 'Gas Addendum'”, Staatsolie said. “This addition to the production sharing contract will establish the procedures and conditions under which the Block 52 partners PETRONAS and ExxonMobil can assess the gas discovery and possibly subsequently develop and produce it.

“Because the negotiations for the Gas Addendum can last almost a year, the agreements made so far in the negotiations are recorded in the LoA”.

Petronas plans to start gas production 2031 if Sloanea 2 proves to be a commercial success. An associated floating liquefied natural gas facility could also be constructed, Staatsolie said.

Roystonea Discovery

On November 2, 2024, Petronas said it hit its second discovery in Block 52. The Roystonea-1 exploration well was drilled to 5,315 meters (17,437.7 feet).

Drilling “encountered several oil-bearing Campanian sandstone reservoir packages”, Petronas said in a statement at the time.

Petronas executive vice president and chief executive for upstream Adif Zulkifli said, “PETRONAS views the Roystonea-1 oil discovery as a positive development towards realizing our differentiated barrel strategy for international upstream ventures, focusing on a material discovery with minimal contaminants”.

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