Staatsolie

STAATSOLIE

PREPARING FOR PROSPERITY

SUSTAINABLE BUSINESS MAGAZINE

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INTERVIEW: STAATSOLIE

PREPARING FOR PROSPERITY 2 | SUSTAINABLE BUSINESS MAGAZINE

Sustainable Business Magazine speaks to Rudolf Elias, Managing Director and CEO at Staatsolie, about oil exploration, efficient operations, and investing in people.

Staatsolie Maatschappij Suriname N.V. is the Surinamese national oil company.

Headquartered in Paramaribo, Staatsolie is tasked with all oil-related activities, from exploration and drilling to refining and marketing, as well as monitoring other oil companies present in Suriname. Staatsolie was founded in 1980 to execute the oil policy on behalf of the Surinamese state – the company’s sole shareholder. Commercial production started in 1982, and today Staatsolie

produces enough diesel at their refinery to meet the entire local demand. Since 2015, Staatsolie has invested over US$1 billion in the further expansion of operations, and the company remains committed to integrity, excellence, and accountability.

Increasingly, international attention has turned towards Suriname as its neighbour Guyana has made a series of recent offshore oil discoveries. As part of Staatsolie’s Vision 2030, the company has committed to sustainably develop the energy industry in Suriname, to guide Suriname towards being a regional player in the energy market, and to contribute to the advancement of Surinamese society. Pivotal to this vision has been Staatsolie’s belief in the likelihood of an imminent offshore oil find – a belief which, in early 2020, was validated by the discovery of oil by Apache Corporation and Total S.A. at the Maka Central-1 well in Block 58.

STRATEGIZING FOR SUCCESS “Everything that we do – and our whole strategy for success – is the way it is because we firmly believe that Suriname is on the eve of a huge oil find,” says Rudolf Elias, Managing Director and CEO at Staatsolie, prior to the announcement of the SUSTAINABLE BUSINESS MAGAZINE

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INTERVIEW: STAATSOLIE

“EVERYTHING THAT WE DO – AND OUR WHOLE STRATEGY FOR SUCCESS – IS THE WAY IT IS BECAUSE WE FIRMLY BELIEVE THAT SURINAME IS ON THE EVE OF A HUGE OIL FIND”

Block 58 discovery. “If you look at the success of our neighbour Guyana – especially after the find of Exxon which was only two kilometres away from the border – we are positive that we are approaching a huge oil find that will not only change the landscape for Staatsolie but also for Suriname.”

Staatsolie itself has also been undertaking exploration on an unprecedented scale, with a recently-concluded nearshore drilling project. “This was one of the biggest projects that Staatsolie has ever executed under our own supervision,” says Mr. Elias.

“It was a project of around US$120 million, and we carried it out in the relatively short time-frame of three hundred days.”

At the conclusion of the nearshore drilling project, six exploratory wells were 4 | SUSTAINABLE BUSINESS MAGAZINE

drilled, and significant data was collected.

Of these six wells, four showed the potential of oil. “We have to start preparing now, which means a change in the way that Staatsolie is doing business,” explains Mr. Elias. “We have to make some changes and simplify our processes. We are not only doing that because we want to find oil, but because it is very important for Staatsolie to be a partner of choice for the International Oil Companies (IOCs). In that situation, we want to ensure we are an equal partner who can carry our own weight. Of course, we are relatively local – a National Oil Company (NOC) – so that would be a big win for us.

So we must change and develop the way we look at our business in order to be the partner of choice.”

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INTERVIEW: STAATSOLIE

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www.medservenergy.com NATIONAL PREPARATIONS An essential part of these preparations involves setting up the infrastructure to ensure local people and businesses can benefit from any find. “It is very important that we start preparing ourselves, not only at Staatsolie, but also in business and the government,” says Mr. Elias. “What is specifically important is that Staatsolie tries to make the business community understand what they have to go through in order to prepare themselves, so that when the oil find takes place, they can participate effectively. We are achieving

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that by making a mock-prequalification as a prerequisite for offshore attendance, and we ask the companies to answer questions to educate them on what will be required. From that we got a profile of the different items the companies will have to work on in order to qualify for offshore work.”

“If there is an off-shore development, no more than maybe five or ten percent of the total development will be kept in Suriname,” explains Mr. Elias. “But that ten percent could be worth US$500 million to perhaps US$1 billion. Also, if you have one find, it will

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not remain with one. Guyana had one find followed by twelve others within a period of four years. They are now busy developing two of the twelve, and the third will soon start. When you have the first find, soon more will come. So the potential amount of business that could come to Suriname would be huge. Surinamese business understands now what they have to do in order to be ready to qualify for future developments.”

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INTERVIEW: STAATSOLIE oil find will be transferred into this fund for investment in Suriname, though the finer details of what percentage of the revenue will go into the fund and what percentage will be reinvested in oil operations still remains to be worked out.

DOWNSTREAM INVESTMENT While Staatsolie is currently focused on upstream investment, the company is also dedicated to streamlining their downstream operations. “We have invested a lot in the downstream,” explains Mr. Elias. “When I took over in 2014, what we stated was that in principle we would refocus on the upstream, but also not forget our previous investment in the downstream. We would need to make that downstream area more efficient and concentrate on downstream cost-cutting exercises in such a way that we are making the investment more efficient, reducing cost and producing more product. In order to get even better returns we absolutely must reduce cost and increase efficiency.”

“One of those key investment areas was a refinery, which ended up being a US$1 billion project,” says Mr. Elias. “This was handed over in 2015 as we started to produce our first premium gasoline and

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INTERVIEW: STAATSOLIE

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diesel, and we are at this moment already at 105% of the nameplate capacity. We will do the first turnaround this year, which will reveal a lot of information about the equipment.

We are curious if we will be able to keep the five-yearly inspection, or perhaps we may have to do so in a three- or four-year cycle.

The first turnaround can be a scary moment!”

“What is very obvious in the way that we think and the way we do business, is that people are our most important resource,” says Mr. Elias. “Especially young talent. We like to try and promote this by design, with education on both the technical side and soft skills. In order to prepare our people, we recently sent them to secondments at IOCs. We strive to send between six and ten on an annual basis, and when they come back they understand that there is a different way of doing business, because they saw how another company does business, in America or Europe. Staatsolie is focused on health, safety, environment, community, and integrity, and aiming for excellence and accountability.” c RUDOLF ELIAS MANAGING DIRECTOR AND CEO AT STAATSOLIE

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Staatsolie Dr. Ir. H.S. Adhinstraat 21 PO Box 4069 Paramaribo Tel.: +597 499649 Fax: +597 491105 info@staatsolie.com www.staatsolie.com

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