Suriname’s GranMorgu Project: Financial Outlook and Challenges

Written by Marcel Chin-A-Lien, Petroleum & Energy Advisor, on 6th June, 2025.

Disclaimer: The following essay represents my personal musings and analysis, that I made principally for myself.

To try to understand this project in a broader and holistical perspective.

Nonetheless I wish to share this opinion, but solely for informational purposes, with those interested in Suriname’s petroleum sector and related financial strategies.

Introduction: A New Era for Suriname

Suriname stands on the threshold of a transformative era.

The GranMorgu offshore oil project, with its 750 million barrels of recoverable reserves, is not just a milestone for Staatsolie, Suriname’s national oil company, but a beacon of hope for the nation’s economic future.

Backed by a US$1.6 billion syndicated loan (with support from Afreximbank and 17 other global financial institutions) and a successful $515.8 million bond issue, Staatsolie has secured a 20% stake in this landmark venture.

The project’s revenue outlook is nothing short of excellent.

Yet, but…as any prudent business developer and financier knows?

The real test lies in weathering the storms of volatile oil prices.

Thus.

Financial Modeling: What Happens When Oil Prices Fall?

At $60 per barrel, GranMorgu’s annual revenue for Staatsolie’s share could reach up to $1.73 billion (?).

Over an assumed 26-year production period (2028–2053), this could generate a hugh cumulative windfall ($45 billion ?).

But what if oil prices fall, below $60, and stay low for years?

To answer this, I modeled four scenarios—$60, $50, $40, and $30 per barrel—tracking the cumulative revenue shortfall against the baseline.

Figure: Cumulative revenue lost compared to the assumed and (hoped for…) $60/bbl baseline over 26 years. 
For example, at $40/bbl, Staatsolie could lose $15 billion in total revenue by 2053.
At $30/bbl, the loss balloons to $22.5 billion.

What does this mean? 

Even with an excellent project, extended periods of low oil prices can erode profits and threaten debt repayment.

In plain terms:

If oil averages $40 instead of $60, Staatsolie could miss out on $15 billion in revenue, almost ten times its current loan.

Debt Liability: Can Staatsolie Withstand the Pressure?

Staatsolie’s annual debt obligations (loan plus bond repayments) are about $210 million.

At $50/bbl, the annual revenue shortfall ($288 million) already exceeds debt payments, forcing Staatsolie to dip into cash reserves or seek refinancing.

At $30/bbl, the shortfall ($865 million/year) dwarfs debt obligations, risking default without drastic measures.

Safeguards: 

The project’s flexible FPSO design allows for operational adjustments, and the syndicated nature of the loan spreads risk among 18 lenders. Staatsolie’s robust governance and cash reserves also provide a buffer.

But these are not infinite.

So, what to do ?

Five Strategic Safeguards

1. Hedge a Portion of Production: Lock in future contracts for 30–40% of output at $50 or above to stabilize cash flow.
2. Lower Operational Breakeven: Invest in efficiency and automation to keep costs below $30 per barrel.
3. Maintain a Liquidity Buffer: Hold at least $500 million in reserves to cover debt during downturns.
4. Consider Equity Sales: Sell 5–10% of Staatsolie’s GranMorgu stake to reduce leverage and bring in strategic partners.
5. Diversify Revenue: Invest oil proceeds in renewables or other sectors to hedge against long-term energy market shifts.

Who am I?

Kind regards.

Marcel Chin-A-Lien

Petroleum and Energy Advisor

48 Years of Global, in-depth expertise, knowhow and insights.

That have generated transformative, multi billion giant fields discoveries, iconic first capitalistic new ventures in the USSR, bid rounds, added value and long term cash flow generating offshore exploration and production activities on Dutch North Sea, M&A, PSC designs, Contract negotiations.

Combined with a cross & trans discipline background of 4 petroleum post grad degrees, that fuse technical, business, commercial and management disciplines, accompanied by fluency in 7 languages in a variety of geographical, socio-cultural and business landscapes. 

“ Exploration & Production integrated with Business & Commercial Development and Critical Insights “

Drs – Petroleum Geology
Engineering Geologist – Petroleum Geology

Executive MBA International Business – Petroleum – M&A
MSc International Management – Petroleum

Energy Negotiator Association of International Negotiators (AIEN)

Certified Petroleum Geologist # 5201 – American Association Petroleum Geologists – Gold standard Certification
Chartered European Geologist # 92    – European Federation of Geologists – Gold standard Certification

Cambridge Award  “ 2000 Outstanding Scientists of the 20th Century ”, UK – Gold standard Award
Paris Awards  “ Innovative New Business Projects “, GDF-Suez, France – Two Gold standard Awards, Paris, 2003.

Public Profile: nl.linkedin.com/pub/marcel-chin-a-lien/9/a73/547/

For Advisory Services contact:

Email: marcelchinalien@gmail.com