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

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PLAYING CLOSE TO THE VEST
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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.

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SPECULATION AND PROJECTION
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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