French energy giant TotalEnergies agreed to invest billions of dollars to draw oil from the seas off Suriname, a deal expected to reverse the economic fortunes of the Caribbean country.
The quality of crude oil found in Suriname is similar to that being extracted in Guyana, whose economic growth rate is expected to reach 38% this year thanks mostly to an explosion in foreign oil investment.
TotalEnergies says the two fields where it would drill could yield around 700 million barrels of crude. However, the first shippings would have to wait until 2028.
Suriname is reeling from 60% inflation, making life even tougher for the 70% of its population who live below the poverty line. The country defaulted on its debt in 2020 and remained in that state for more than three years.
During this time, the country obtained a US$688 million bailout from the IMF to avoid economic collapse. The bailout came with the condition that Suriname implement a series of economic reforms to reduce government spending.
In response to the IMF’s suggestion, the country stopped subsidizing power and water supplies. Once the oil rig is built, the country could be able to extract around 200,000 barrels of oil a day.
President Chandrikapersad Santokhi said in a statement that his administration would ensure that future income from offshore oil and gas would be spent wisely to contribute to a prosperity and stability fund.
He also assured there would be attempts at diversification of the economy by developing sustainable sectors such as agriculture and tourism.