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Apache Promotes Suriname in Strategic Outlook

Copyright © 2021 Energy Intelligence Group

US independent Apache Corp. said it is focusing more of its upstream capital on its promising development offshore Suriname, which the company sees as an increasingly important long-term peg in its larger upstream strategy. Apache holds a 50% operated interest in Block 58 off the coast of the South American country alongside France's Total. The partners have drilled three successful exploration wells so far in the block, with a fourth well currently being drilled, all operated by Apache. A fifth well operated by Total is slated to be spud in early 2021, with which Total will take over operatorship of the block. Apache CEO John Christmann said in the company's third-quarter earnings report that the Kwaskwasi well, the partners' third oil discovery in Block 58, was "our best well in the basin so far" and that it plans to file an appraisal plan by year's end (OD Sep.15'20). “A lot of hydrocarbons have been discovered,” Total CFO Jean-Pierre Sbraire said Oct. 30 during a company conference call. "The way forward is very clear for us" (OD Oct.30'20). Schreiner Parker, vice president of Latin American business development for Rystad Energy, told Energy Intelligence that Total has around 50 independent prospects mapped within the block. “The current resources from the three discoveries are enough to justify bringing in two [floating production, storage and offloading (FPSO) vessels] capable of producing around 220,000 barrels per day,” he added. The promising early exploration results in the Suriname offshore has Apache ready to take a deeper plunge. “Apache has strategically chosen to direct a significant portion of our upstream capital investment to our large-scale opportunity in Suriname," said Christmann. "In this price environment, we believe this will create more value for our shareholders over the long term than directing capital to short-cycle projects that would generate near-term production growth at relatively lower returns." Christmann told analysts and investors during the company's third-quarter earnings that Apache was “making a long-term decision because there’s going to be much greater benefit when you get three or four years out.” Paris-based Total plans to pick up two rigs early next year for a combination of exploration and appraisal work, Christmann said, but added that more appraisal work was needed to move to the next stage (OD Jul.30'20). With exploration and appraisals slated for the next two years in Block 58, a final investment decision from Apache and Total is still likely some years away. Sbaire said Total is eyeing first production in the play by 2025. Apache also holds a 45% interest in the adjacent Block 53. The company has one remaining commitment there, which needs to be drilled by the end of the second-quarter 2022. Suriname and neighbor Guyana share the aptly named Guyana-Suriname Basin, where an Exxon Mobil-led consortium has found more than 9 billion barrels of oil equivalent of gross recoverable resources. Despite some delays in 2020, Exxon and partners believe the block could support at least five FPSOs with oil output topping 750,000 b/d by 2026 (OD Oct.1'20).

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