Oil giants look offshore Suriname
PARAMARIBO, Suriname, Thursday July 12, 2012 – Oil companies continue to flock to the Caribbean in search of the next big oil find.
Now, Chevron has announced that it will join with Kosmos Energy Ltd. to explore for oil off the coast of Suriname in the hopes of locking in part ownership in what could be a prolific new oil basin.
Financial terms were not disclosed but reports are that Chevron agreed to buy a 50% stake in two Kosmos deep-water leases located about 155 miles from the Surinamese capital of Paramaribo. While Kosmos, a private-equity-backed oil company based in Dallas, will retain the other 50% and remain the operator during the exploration phase, Chevron has reportedly been guaranteed the right to take the lead in developing the oil field if any oil is found.
"Suriname is a textbook frontier-exploration play," research firm Raymond James said in an analyst note. "Exploration results thus far have been choppy."
Kosmos became known for discovering the Jubilee field, off the coast of Ghana, one of the largest oil finds in West Africa in recent history. It acquired the license to explore the two deep-water blocks off Suriname in 2011.
For Chevron, the second-largest U.S. oil company after Exxon Mobil, the move is another bet on a new frontier area in the Atlantic basin. The San Ramon, Calif., company is already looking for oil off Liberia. It also has developed massive fields in more established production areas off of Angola, Nigeria and Brazil.
"This agreement enables us to explore for new resources in this frontier basin," said George Kirkland, vice chairman of Chevron, in a statement.
The blocks are located at depths between 650 and 8,500 feet. First drilling is planned for 2014.
Experts have estimated that giant oil fields, such as those found offshore Sierra Leone and Ghana in West Africa, could also be present off the shores of Suriname and the Guyanas, given that the two continents once share the same land mass and geographic profile millions of years ago.
Oil exploration is currently ongoing by major international firms off the coasts of Trinidad, Cuba, and soon Barbados as announced by that island’s minister of finance in his recent national budget presentation.