• Since its founding on December 13, 1980, Staatsolie has paid more than US$ 4 billion in taxes and dividends to the State. Staatsolie's added value to the Surinamese economy is a multiple of this amount.

• A concrete example: In 2023, the contribution to the state treasury was US$ 335 million. That is over thirty percent of the US$ 1 billion in government revenue in 2023. The 2023 annual report and those of recent years can be consulted on the Staatsolie website.

• Staatsolie significantly contributes to employment in Suriname with approximately 1,150 direct jobs and many more indirect jobs.

• Staatsolie's contribution to the community is significant. Between 2021 and 2023, about US$ 5 million was invested in various social and community projects. See also the sustainability reports of 2022 and 2023.

• Thus, Staatsolie makes a substantial contribution to Suriname's development. However, the economic development of small open economies like Suriname's is not solely dependent on natural resources. Factors such as productivity, institutional capacity, human resources, and fiscal discipline are also decisive.

All PSCs are and will be concluded based on and in accordance with the Petroleum Law of Suriname. Under the 1986 Mining Decree, concession rights for petroleum activities are exclusively granted to state companies, in this case, Staatsolie. According to the Petroleum Law (Official Gazette 1991, No. 7, and the Amendment of the Petroleum Law 1990), Staatsolie is authorized to enter into petroleum agreements with qualified petroleum companies after government approval.

The terms for Suriname are favorable with a 6.25% royalty, profit oil distribution, and 36% income tax, resulting in a share for Suriname of 60-70% (after costs), depending on the oil price. Suriname's favorable position has also been confirmed through benchmarking with PSCs from other countries such as Guyana, Brazil, and Angola.

In 2015, the risks in Suriname's offshore were very high. To make it as attractive as possible for interested parties, there was no signing bonus (also known as auction price) for Block 58. Incidentally, a signing bonus is not always agreed upon in the oil and gas world. Contractors (TotalEnergies and APA) have since invested about US$ 2 billion in exploration activities in the block.

Royalty is the fee (for the right to extract oil) paid to the Republic of Suriname. According to the Mining Decree, the royalty is 6.25% of gross production in Suriname's offshore. This percentage remains unchanged throughout the contract's duration.

Cost oil is the amount of crude oil produced that, after deducting royalty, is allocated to the contractor for recovering expenses according to the PSC. A cost oil ceiling has been set for this. This ceiling ensures that there is always some profit oil left, especially at the beginning of the project.

Profit oil is the amount of crude oil produced that remains after deducting royalty and cost oil. The profit oil is shared between the contractor and the State. This distribution is based on an allocation key (R-factor).

The R-factor is defined in the PSC with a formula common in the oil and gas industry. The R-factor ensures that at low oil prices, the State receives relatively less, and the contractors receive more. During periods of high oil prices, the situation reverses: the State receives much more, and the contractors relatively less. The PSC with an R-factor clause and formulas were developed in the 1960s in Indonesia and have since been adopted by many other countries.

The PSC was drafted and concluded according to international standards. The contract stipulates a 6.25% royalty that the State will always receive, independent of cost and profit oil. In the PSC for Block 58, the agreed cost oil ceiling is not the standard 80%. In the first years, it depends on the international oil price. The R-factor is defined in the PSC.

The State receives income tax of 36% on the contractors' revenues. These revenues consist of cost and profit oil, minus allowable deductions. Thus, the State earns from royalties, shares in profit oil, and levies taxes on the contractors' offshore income.

We have calculated that the expected contribution to Suriname from the GranMorgu field in Block 58 at different oil prices could look like this:

See also the Model PSC on the Staatsolie website and our Offshore Infomercial.

Contractors pay income tax as described in the tax law (36% on their revenues from cost oil and profit oil minus allowable expenses and depreciations). No income tax advantage is granted to the contractor in Block 58. On the contrary, the tax rate of 36% is stabilized in accordance with the Petroleum Law.

It is common in the oil and gas sector for materials, machinery, and other necessities for oil and/or gas production to be exempt from import and export duties. This sometimes relates to the mobility of resources (such as drilling machines). The State, however, receives a large portion of total revenue through royalties, cost and profit oil, and taxes on the contractors' offshore income. The total share flowing to the state treasury is relatively large.

The revenues from Block 58 will significantly contribute to state income (see point 9). Additionally, there are growth opportunities for local companies supplying goods and services for this project—starting from the preparation phase (5 years). Both in the preparation and production phases, the project is expected to create employment in Suriname. The total demand for labor from local companies is expected to range between 2,000 and 4,700 jobs over the project's lifespan.

However, the benefits of these oil revenues for Suriname depend on various factors such as fiscal and monetary policy, good governance, legislation, and strong institutions. It is also important to have a local content policy and operationalize the savings and stabilization fund. To achieve broad prosperity, all stakeholders in Suriname—the government, businesses, and civil society—need to be involved.

While Staatsolie supports transparency, there are sufficient reasons not to make the PSC of Block 58 (and other blocks) public. Full transparency is challenging because the exact conditions differ slightly per block. There are several reasons for this. Not all offshore blocks were released simultaneously. Also, not all blocks are equally attractive from a geological perspective. To enable exploration of these blocks, the respective PSCs include conditions aligned with their risk profiles. If these "better conditions for contractors" become known, there is a risk that other parties with geologically better/more promising blocks under contract will also demand these terms. Full disclosure is therefore not in Suriname's best interest.

Publicly listed companies usually do not disclose contractual terms. Generally, this is not required. However, there are international transparency standards, such as the Extractive Industries Transparency Initiative (EITI), that ensure financial flows can be tracked. The EITI standard promotes good governance of oil, gas, and mineral resource exploitation. Suriname has been committed to EITI since 2016, and Staatsolie is an EITI-supporting company. TotalEnergies will use EITI standards to make its financial flows public and transparent during the production phase of Block 58.

You can consult the Model PSC on the Staatsolie website.

Staatsolie has a transparent corporate governance policy. The various components of this policy can be found on our website. Accountability and transparency are essential, and therefore Staatsolie finds it important to communicate transparently with all stakeholders.