The Government continues to establish its credentials amongst the oil sector, with fair and balanced fiscal terms enduring. The continued pragmatism on local content and the development of a petro-fund are all positives that engender the Positive outlook.
August 8, 2022
Americas - South
Northern South America, bordering the North Atlantic Ocean, between French Guiana and Guyana
Suriname has a relatively standard form of Production Sharing Contract ("PSC") fiscal regime. Royalty rates, cost recovery ceilings and corporate income tax rates are all fixed. Profit oil splits vary with project profitability (the R-Factor). There are some indirect taxes, but no bonuses, rentals or fees are payable.
Suriname officially supports and encourages business development through local and foreign investment. The overall investment climate favors U.S. investors with experience working in developing countries. To attract foreign direct investment (FDI), authorities have planned to update institutional and legal frameworks to protect investors and eliminate restrictions regarding investment income transfers and control related FDI flows. However, the World Trade Organization’s 2019 Trade Policy Review concluded that Suriname’s investment regime has not changed since its last review in 2013. The report states that the overall regime, particularly the approval of FDI, may be discretionary rather than rules-based. The extractives sector has historically attracted significant foreign direct investment, but numerous factors negatively impact the investment climate as a whole. January 2020 saw Apache and Total announce a “significant oil discovery” off the coast of Suriname, followed by a similar discovery in April 2020. Experts estimate that it will take 5-10 years to begin offshore oil production, assuming world oil prices support it. The CEO of state-owned oil company Staatsolie estimates that the government of Suriname could earn $10-$15 billion over the course of 20 years if production reaches similar levels as in neighboring Guyana.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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