By signing the Production Sharing Contract (PSC), Staatsolie grants Chevron rights for exploration, development and production in the offshore area, while Staatsolie retains the right to a forty percent participation. For the first time in Staatsolie's history the company will participate as a partner in offshore activities with forty percent, from the moment the PSC is signed. The cooperation was confirmed by the signing of the Joint Operating Agreement (JOA) in which the conditions are specified. The agreements enable Staatsolie to have more influence in the decision-making process and mean that Staatsolie will co-finance as a partner in the possible development and production phase.
The costs in the exploration phase will be carried by Chevron. The exploration period, as set out in Chevron's PSC, will last six years, divided into three two-year phases. A signing bonus of USD 30,875,000 will be paid by Chevron to Staatsolie after signing the two contracts.
Chevron showed interest in Block 5 at the Suriname Shallow Offshore Bid Round 2020/2021. In this tendering round, interested companies could bid for blocks in the so-called shallow offshore, the sea area up to 120 kilometers from the coast and with a water depth of up to 100 meters. Chevron made the most favorable offer for Block 5.
The PSC also states that Chevron should give preference to materials, services and products offered by Surinamese companies. The condition is that they meet the quality, price and other commercial requirements. In this way, local participation within the offshore oil industry is stimulated.
The signing of these contracts contributes to Staatsolie's effort to develop offshore for the benefit of the current and future Surinamese society. Staatsolie is enthusiastic that it has been able to add another major player from the oil industry to the list of operators. These parties have resources and systems at their disposal to maximize the chance of development.
Block 5 is located in the west of the shallow offshore area and has a size of 2235 km2. The 30-year contract was signed by Staatsolie's General Manager Annand Jagesar, Upstream Director Rekha Bissumbhar and Chris Steele, Chevron's Head Emerging Countries.