Suriname state oil company considers share offering

July 20, 2012 8:21 AM

* Revenue could help finance oil exploration
* 1999 effort to privatize Staatsolie sparked protests
PARAMARIBO - Suriname state oil company Staatsolie is considering selling stock through a partial privatization similar to those carried out by state energy firms in Colombia and Brazil, a company official said on Friday.

The government is preparing to conduct a study on a possible share offer, which could help the small South American nation finance exploration of onshore and offshore areas that have drawn the interest of oil companies including Chevron.

Suriname will likely approach any stock sale with caution given that a plan to privatize Staatsolie in 1999 was met with widespread protests that ultimately forced the president to leave office.

"Staatsolie wants to explore the possibility of issuing shares," said the company's general manager Marc Waaldijk in a statement. "The state can sell a minority of its shares and use the proceeds for high-priority national objectives."

A committee made up of state and company officials will conduct a study and offer a recommendation to the government.

Waaldijk said the goal would be to create an ownership structure similar to that of Brazil's Petrobras or Colombia's Ecopetrol, which sold shares to private investors but left the government in control of key decisions.

Staatsolie, which produces 16,000 barrels per day, has already carried out a local bond issue for $55 million and secured a $245 million loan from a consortium of foreign lenders. In 2010, it reported revenue of $566 million and a before-tax profit of $291 million.

Global energy companies have shown a growing interest in the energy potential of South America's northeastern shoulder. A 2011 discovery off the coast of French Guiana was described as "game changer" for the region's oil prospects.

Oil companies including Repsol and Exxon have been invited to explore off the coast of Guyana, which lies to the west of Suriname.

Chevron in June announced a deal with oil and gas company Kosmos Energy that gave it a 50 percent working interest in two blocks off Suriname's coast.

Suriname is also considering selling shares in telecommunications firm Telesur and Surinam Airways, which are state owned, and bank Hakrinbank, which is partly owned by the government.

(Source: Reuters)