We just visited the beautiful Dragon and Tiger Mountain, where Taoism started some 1,900 years ago in our home province of Jiangxi. We are amazed by its influence in China and Asia.
Now, let’s look at two pieces of energy news last week.
Shangyou Nie
Editor, Well Read
TotalEnergies Takes FID on Block 58, Hoping to Start a New Chapter for Suriname
On 1 October, TotalEnergies and partner APA Corp. announced the Final Investment Decision on the GranMorgu oil project in deepwater Block 58 in Suriname. This will start the development and production phase for the companies’ discoveries in Suriname.
Why it matters: The project will be the first big step toward making Suriname an oil producing and exporting nation.
What they are saying: “The FID is a historical milestone in Suriname’s oil and gas industry. What seemed like a distant dream is becoming reality. This will be the largest investment ever in our country,” said Annand Jagesar, managing director of state company Staatsolie.
About the FID:
TotalEnergies (operator, 50 percent) and its equal partner APA Corp. (formerly Apache) announced their FID in Suriname, according to Staatsolie.
The $10.5 billion GranMorgu project will focus on oil development and have a production capacity of 220,000 barrels of oil per day.
First oil is expected in 2028, while associated gas will be injected for pressure maintenance.
GranMorgu, which translates to “new dawn” in the local language, is formerly known as the Sapakara South-Krabdagu project.
It will be produced from a floating production storage and offloading unit, which could also serve as the hub for future sub-sea tie-back projects.
Staatsolie has an option to own up to 20 percent of the project. The company has until June 2025 to decide how much equity it would like to claim.
About the discovery:
The Maka Central-1 discovery is on trend with Stabroek Block in Guyana, where ExxonMobil and partners have made 12+ billion barrels.
The discovery well is located in 1,000 meters of water depth in Block 58, immediately east of the Suriname-Guyana maritime border.
APA Corp. and TotalEnergies found high-quality light oil and condensate (API 40–60) in a stacked pay in the Upper Cretaceous Campanian and Santonian reservoirs.
TotalEnergies and APA Corp. have subsequently made five discoveries in the block. The two largest discoveries are Sapakara South and Krabdagu, with a combined 750 million barrels of oil reserves.
About the TotalEnergies and APA Corp. partnership:
In December 2019, Total farmed into 50 percent of Block 58 to join then operator Apache, as the exploratory well was being drilled.
In the farm-in agreement, APA Corp. was going to drill two more exploration/appraisal wells. Afterward, Total would take over the operatorship to prepare for the development and production phase.
Total paid $100 million for the farm-in and agreed to carry an undisclosed amount of APA Corp’s share of the development cost.
What to watch:
With the FID by TotalEnergies and APA Corp, Suriname is on its way to become the latest oil producing country in South America.
Will Staatsolie join the project with 20 percent equity? Or will another IOC try to join the project, taking some of Staatsolie’s 20 percent?
Will other IOCs—including ExxonMobil, Shell, and Hess—and NOCs such as Petronas and CNPC be able to make more technical and commercial progress from their ongoing exploration campaign?
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Deja vu: Sound familiar? This is the second ruling of its kind in 2024. In May, the FTC banned Pioneer Natural Resources founder and former CEO Scott Sheffield from joining ExxonMobil’s board, while approving ExxonMobil’s acquisition of the independent producer.
The order was passed by a 3:2 vote divided along party lines.
FTC Chair Lina Khan argued that increased American oil production should have driven down prices for consumers, but John Hess’ communications with OPEC could have helped the group’s goals of propping up prices.
During these communications, Hess stressed the importance of “oil market stability” and “inventory management” and encouraged OPEC to stabilize oil production and draw down inventories, as “there is a direct correlation between inventory levels and oil prices.”
Both Chevron and Hess said that they would accept FTC order to allow the merger to proceed, with Hess calling the FTC concern “without merit.”
Chevron said that John Hess will serve as “an advisor to Chevron on government relations and social investments in Guyana.”
Background:
John Hess has been at Hess Oil Co.’s helm since 1995, after his father, Leon Hess, stepped down.
Chevron and Hess had hoped for a decision in Q4 2024. Chevon’s attempt to reach a compromise has reportedly failed.
Are these rulings a political move?
Two dissenting statements were issued by Republican commissioners Melissa Holyoak and Andrew Ferguson, stating that Khan is trying to placate congressional Democrats who are pressuring the FTC to get tougher on big oil.
According to the WSJ, some energy executives are saying that the FTC has embarked on a political witch hunt, arguing that “it would be impossible for a single U.S. driller to meaningfully inflate oil prices.”
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