Suriname May Be Newest Huge Oil Discover as Trade Cuts Prices

Suriname, Guyana and Brazil are now attracting more new investment than the Gulf of Mexico and other more established oil fields. And they help keep global oil prices relatively low and undermine the efforts of Russia and its allies in the organization of oil-exporting countries like Saudi Arabia to control global supply and raise prices.

In Guyana, oil companies have found more than 10 billion barrels of likely reserves of accessible oil and gas offshore, according to IHS Markit, the energy consultancy. Production started in 2019 and is ramping up quickly. According to consultants, Guyana is already one of the 50 largest oil basins in the world.

Suriname has at least three to four billion barrels of reserves, or up to half of the new oil and gas discovered worldwide last year, according to energy experts.

However, using these reserves in a way that benefits the people could prove challenging for Suriname, a former Dutch colony that has been politically volatile for the past 40 years and owned by Desire Bouterse, a former sergeant who was killed in a coup took power, was ruled. In 1999 a Dutch court convicted Mr Bouterse of drug trafficking. In 2019, a Suriname court convicted him of the murders of 15 political opponents in 1982 and sentenced him to 20 years in prison. He lost an election and retired last year but was not sent to jail.

New President Chan Santokhi, former police chief and justice minister, faces many challenges, including the coronavirus pandemic and a financial crisis. The unemployment rate was 11.2 percent last year and inflation is extremely high. The IMF expects consumer prices to rise by almost 50 percent this year.

Economy & Economy

Updated

Jan. 19, 2021, 6:30 p.m. ET

Oil and gas exploration could easily lift the country of around 600,000 people, including the people of Milwaukee, out of poverty if Mr Santokhi’s government takes the right steps. However, there are numerous examples throughout history of countries where energy and minerals have not been properly managed. This phenomenon is referred to by economists as the “resource curse”.

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