Both Suriname and Guyana have discovered billions of oil barrels, which could lead to flourishing their respective economies. However, according to our Energy Practice Co-Director Arthur Deakin, Suriname has a long way to go to enhance its economy. Deakin points out three key things to learn from Guyana.

Below we provided and extract from Deakin’s analysis:

Suriname, like Guyana, has just discovered billions of barrels of recoverable oil offshore its coast. This has attracted a flurry of international investors seeking to capitalize on the sudden boom in its oil & gas sectors. The mass of foreign attendees at the Suriname Energy, Oil and Gas Summit, (SEOGS), is a sign of the spotlight shining on the small Latin American country with nearly 600,000 people. In a recent tender to develop eight of the country’s offshore blocks, oil majors Qatar Petroleum, TotalEnergies and Chevron were the winners. However, despite the promise of the newfound resources, Suriname had the second worse economy in Latin America in 2020, only behind the authoritarian Venezuela. With a 13% GDP decline, high levels of inflation, and a fifth debt restructuring in the past 15 years, the country’s macroeconomic prospects remain dire.

In April, the newly elected center-left President, Chan Santohki, reached a U$690 million financing agreement with the IMF that includes necessary austerity measures to put the country back on a sustainable economic path. Although the details have not been fully disclosed, energy subsidies[1] provided to the state-electricity company will likely be removed. A fuel tax of 1 Surinamese dollar per gallon, will also likely be implemented. These measures will be poorly received by the population and may cause social unrest.

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