HOW MUCH DISPUTED OIL? GOVERNMENT, MEDIA DISAGREE

C O N F I D E N T I A L PARAMARIBO 000419 SIPDIS SIPDIS STATE FOR WHA/CAR JROSHOLT; EB/ESC/IEC/ENR KARL RIOS; INR/IAA RCARHART E.O. 12958: DECL: 08/07/2017 TAGS: ECON EFIN EMIN ENRG EPET KTDB PBTS EINV NS SUBJECT: HOW MUCH DISPUTED OIL? GOVERNMENT, MEDIA DISAGREE Classified By: P/E Officer J. Sanders for reasons 1.4 (b) and (d) ¶1. (C) SUMMARY: Government officials are reluctant to give an estimate of the amount of oil in the disputed maritime area between Guyana and Suriname. Nevertheless, in recent years the GOS has sought out foreign investment with offshore production sharing agreements. As for quantity, media report 15 billion barrels of oil. However, one government expert did call this figure excessive, indicating 150 million barrels to be more likely. He based this on estimates made in nearby areas. The bottom line is that no one knows for sure. END SUMMARY -------------- PLAYING CLOSE TO THE VEST -------------- ¶2. (C) In previous meetings with government officials, Emboff's questions about the maritime dispute have usually yielded nebulous answers about the quantity of oil and gas in the area. Marc Waaldijk, President of Suriname's state run oil company, Staatsolie, declined to speak about potential oil reserves and possible outcomes of the dispute. Mum was also the word with former GOS Ambassador Kris Nandoe, who was an advisor for Suriname to the International Tribunal of the Law of the Sea, under the auspices of which the outcome of the dispute is being decided. -------------- SPECULATION AND PROJECTION -------------- ¶3. (C) Jainoel Abdul, Permanent Secretary of the Ministry of Natural Resources, told Emboff on July 26, 2007, that the figure of "15 billion barrels" frequently listed by local media is a guess-timate regarding oil in the entire Guyana Shield, a maritime area extending from Venezuela to French Guiana, not just the disputed area between Suriname and Guyana. He thought 150 million barrels to be a more accurate estimate for the disputed area. Abdul said seismic tests performed by private companies in undisputed Surinamese waters project reserves of 160 million barrels in that wedge of sea. NOTE: (The GOS has not conducted its own seismic tests.) 4 (C) GOS state oil company Staatsolie historically has managed all phases of oil production in Suriname; however, in recent years it has sought out foreign investment with offshore production sharing agreements which Abdul said are "working well." Staatsolie retains ownership of the concessions, while foreign companies become contractors of Staatsolie. Spanish based Repsol, in a production sharing agreement with Staatsolie, will begin drilling this year in Suriname's undisputed waters. Oil companies Occidental (U.S.),Murphy Oil (U.S.) and Maersk (Denmark) have also negotiated production sharing agreements with Suriname and are expected to start drilling test wells soon. Abdul projected that results may portend a similiar quantity in the adjacent disputed area, but then admitted "Only actual drilling in the end will determine what is available; projections do not mean anything." ¶5. (C) COMMENT: While government insiders like Waaldijk and Nandoe may have held back out of discretion, they are equally likely to have done so out of ignorance. As permanent Secretary Abdul points out, nobody really knows. However, if the Maritime Dispute is resolved as expected in August 2007, the hunt for oil will certainly heat up. At this point, the potential for significant income from the offshore areas remains more fantasy than fact. END COMMENT SCHREIBER HUGHES