Surinamese nationals to receive US$750 royalties’ payment from energy sector

President Chandrikapersad “Chan” Santokhi of Suriname has announced a new financial initiative called Royalties for Everyone (RVI), aimed at distributing oil royalties to every Surinamese national. Under this plan, each Surinamese citizen will receive a savings note worth US$750, which will accrue seven percent interest annually.

The funds will come from the future royalties generated by Block 58, a key oil exploration area. The RVI initiative is designed to provide long-term financial benefits to the people of Suriname by sharing the wealth from the country’s energy sector, with payouts to be made in the future. This move reflects the government’s commitment to ensuring that the nation’s citizens benefit from its natural resource wealth.

Santokhi said the payment would only be made when the oil from Block 58 has been sold and Suriname has received the royalties.

”The RVI is listed in US dollars so that it is stable in value. The payment will be made in Surinamese dollars. For people over 60 years old and people with disabilities, options are being developed to receive these before 2028.

“We must now translate that positive impact into opportunities for our own people. There are opportunities for our entrepreneurs, our youth to shape the future of Suriname with the right education and training,” Santokhi said as he spoke of the positive impact of an agreement reached with TotalEnergies, the global integrated energy company that produces and markets oil and biofuels, natural gas and green gases, renewables and electricity.

In October, TotalEnergies chairman and chief executive officer, Patrick Pouyanné, held talks with President Santokh and Annand Jagesar, the chief executive officer of the state-owned  Staatsolie Maatschappij Suriname NV, Suriname’s National Oil Company.

They later announced the Final Investment Decision (FID) for the “GranMorgu” development located on offshore Block 58.

According to a statement posted on the website of TotalEnergies, the GranMorgu project will develop the Sapakara and Krabdagu oil discoveries, on which a successful exploration and appraisal campaign was completed in 2023.

It said the fields are located 150 km off the coast of Suriname and hold recoverable reserves estimated at over 750 million barrels.

The project includes a 220,000 barrels of oil per day Floating Production Storage and Offloading (FPSO) unit, that replicates a proven and efficient design.

Total investment is estimated at around US$10.5 billion and first oil is expected in 2028.

The GranMorgu FPSO is designed to accommodate future tie-back opportunities that would extend its production plateau.

TotalEnergies is the operator of Block 58 with a 50 per cent interest, alongside APA Corporation (50 percent).

Staatsolie has announced its intent to exercise its option to enter the development project with up to 20 percent interest. Partners agreed that Staatsolie will contribute to the project from FID and will finalise its interest before June 2025.

The Suriname Constitution stipulates that “natural resources are the property of the nation and will be used to promote economic, social and cultural development”.

It also states that “the State strives for a fair distribution of the national income, aimed at a fair distribution of welfare and prosperity among all levels of the population”.

Speaking at a luncheon for the media, Santokhi, who was accompanied by the visiting Prime Minister of Curacao, Gilmar Pisas, who was a special guest of the country celebrating its 49^th anniversary of independence, said “after the announcement of the first investment decision for block 58, ‘I have received many requests to better implement those requirements of the constitution.’

“And some groups, especially retirees, have informed me that they, unlike younger generations, will not benefit from the positive effects of oil in the country.

“With these requests in mind, I have commissioned financial experts to propose a financial instrument that offers the people of Suriname a share in our natural resources.

“Today I can announce the creation of a financial instrument that offers the people of Suriname a share in future oil royalties. In this way, our people become de facto owners of Suriname’s natural assets.

“Consider this share as a form of reward for a number of years of necessary efforts during the macroeconomic and financial stabilization,”  Santokhi added.

The government said the “Royalties for Everyone” has three objectives, namely that everyone has a share in the development of the oil and gas sector, just as other countries, such as Alaska, have done.

It said citizens are rewarded for the years of necessary efforts during the macroeconomic and financial stabilization and thirdly that the instrument is a powerful incentive to achieve important and cross-party policy goals such as reducing the informal economy, by everyone freely identifying themselves with the tax authorities, and everyone who does not yet have one, getting a bank account.

Santokhi said that several experts have been working for several months, under the coordination of the ministry of finance and planning, to develop this instrument, with the timeline that it will be implemented in the first half of 2025.

“I expressly inform you that the RVI will be paid from future royalties to be received by the State of Suriname.

“The State will not be burdened with a loan and future oil will not be pledged. The only thing that will happen is that part of the future royalty revenues will be allocated to the population,” Santokhi added.