Staatsolie Annual Report 2017

Annual Report 2017 11
methods to increase our current 20% ultimate
recovery rate to 25-30%.
After resolving start-up issues during 2016, our
refinery managed to produce an average of 9,000
bbls high-end products per day from August to
December 2017. Pleasingly, that was 50% more than
the previous 7 months of the year. On December 25
the milestone of 10,000 bbls per day of premium
diesel and gasoline was reached – a worthy Christmas
present for the team! In 2018 our target is an average
of 8,000 bbls high-end products per day. The focus
of the refinery operations remains to ensure a steady
output increase against lower costs.
In 2017, we also saw our first full year of gold
production from the Merian gold mine, with our
25% share yielding 127,000 oz., contributing
US$ 92 million to Staatsolie’s EBITDA at an average
gold price of US$ 1,265/oz. In 2018, we expect
similar results from this partnership.
Following a rigorous play based exploration process
and an independent expert review, our exploration
team identified 20 prospects in our nearshore
acreage in 2017 – a commendable achievement.
In 2018, following further assessments, we started
the preparations for a 10-well exploration drilling
campaign nearshore, with execution starting the
second quarter of 2019.
Offshore partnerships
Although the 2 exploration wells drilled offshore by
our partners in 2017 did not result in a discovery,
I remain extremely optimistic that a commercial
discovery is on the horizon. This belief is shared
by the industry as shown by the closing of 2 new
Production Sharing Contracts with renowned
IOCs Ex xon, Hess and Statoil in 2017. In 2018,
2 exploration wells will be drilled and for 2019
another 5 are planned. It is of utmost importance
we get prepared for what I believe is the near-term
game changer for both Staatsolie and Suriname
when a discovery is made. That is why we hosted
a National Oil Seminar in October 2017 to kickoff
a dialogue with the government, and we will be
conducting an industrial baseline study in 2018
with the local business community and educational
institutes to determine Suriname’s readiness gap.
cost quartile, we will have to enter the international
capital market preferably through an Initial Public
Offering (IPO). This requires us to bring our
company to world-class standards. With regard
to our debt position, we will have refinanced our
US$ 700 million outstanding facilities by May 2018
to release US$ 100 million for nearshore exploration
without taking on additional debt. The next step in
our financing strategy is to diversify our sources of
funds by creating a mix of lenders. To this end, we
intend to issue an international bond in the next 12
months. This will introduce Staatsolie to international
investors and as such help prepare for an IPO.
In 2017 we further rolled out our culture change
program, through which we strive to embed our core
values in our behavior and performance management
in our daily operations. Additionally, we are putting
2 key programs in place: succession planning and
secondments to international oil companies for our
young, bright talent. These secondees will return
to us with enhanced capabilities and performance
driven behavior that culture of multinationals
deliver. Our next step is to simplify the way we run
our business. In the end, I want all of us to have a
stronger confidence in our own abilities – one that
will be shared by our partners. It is our aim that our
entire workforce comes to work every day with a
true sense of purpose and leaves with a sense of
accomplishment.
A new era
2017 has been a good year and I want to thank
our employees, our Supervisory Board and our
Shareholder for their continued belief. I am sure
2018 will be even better. With a renewed focus
on our nearshore and offshore, partnering with
international oil companies, and joining the
international capital market, we are at the beginning
of a new era for Staatsolie, the business community
and Suriname.
Rudolf Elias
Managing Director
Creating a world-class company
In order to participate in an offshore discovery,
which we will only pursue for projects in the lowest