Staatsolie

Staatsolie, a Surinamese state-owned company, laid out an ambitious series of goals three years ago. The strategic long-term, four-phase plan – Vision 2020 – is meant to increase its oil refining capacity, increase its oil reserves, develop renewable energy resources and separate its commercial and institutional functions by the year 2020. As a commercial producer, Staatsolie explores, drills, produces, treats and refines crude oil. It also owns Staatsolie Power Co., which operates a thermal power plant.

As a government agency, Staatsolie acts on behalf of the state in negotiating petroleum contracts with international oil companies and monitors the activities within its borders. It also advises the government on petroleum policies.

Besides the separation of its institutional and commercial roles, Vision 2020 focuses on ways to improve Staatsolie’s commercial functions while developing new, profitable programs. Managing Director Marc Waaldijk explains the company has sustained that focus despite public scrutiny against Staatsolie’s diversification plan.

Waaldijk insists that for Staatsolie to continue, it must expand beyond oil production. “We are already halfway through the 2008-to-2012 planning period,” he states. “We have evaluated the program to find out whether Vision 2020 is still valid and if adjustment was necessary. The finding of the evaluations was that we are right on track.”

Today, Staatsolie produces 16,000 barrels of crude oil per day, and has a refining capacity of 7,000 barrels per day producing diesel, fuel oil and bitumen. Its thermal powerplant added 14 megawatts in 2010 to produce 28 megawatts. Staatsolie steadily made investments that will affect each one of these functions. Its $450 million budget for 2011 allocated $85 million for operations and $370 million for investments.

Its exploration budget was bolstered by an additional $50 million to expand its oil reserves to 64 million barrels and maintain its 16,000-barrels-per-day production. Though still early in the Vision 2020 program, this task has proved to be Staatsolie’s most daunting undertaking.

“We want to maintain a production level of 16,000 barrels per day, and that will require an extensive drilling program,” Waaldijk says. “Many do not seem to understand that maintaining a certain production level requires enormous investments.”

As it identifies reserves, Staatsolie is increasing its refining capacity to 15,000 barrels per day, nearly the amount of oil it produces. That effort has seen much more positive results than its exploratory program. Last year, it received $235 million through a consortium of foreign banks and a $55 million government bond that will finance the refinery expansion and the remainder of the 2008 to 2012 program. It hired the Italian-based Siapem to manage the two-year construction effort that will begin late 2011. The expanded capacity will allow Suriname to decrease oil imports and develop a more self-sufficient energy supply.

Staatsolie also is investing in the development of renewable energy programs. “Every self-respecting oil company in the world has shifted from oil to energy,” Waaldijk says. “Depending on the country, the focus is on wind energy, solar energy, biofuel or hydro energy. Everybody is in renewables. We have to follow suit if we want Staatsolie to survive. Oil is finite, but renewables are infinite.”

After evaluating several options for producing biofuel in Suriname, Staatsolie decided to explore the production of biofuel from sugar cane. It also is seeking new renewable power sources for its power company subsidiary and plans to construct the TapaJai hydro plant that will harness the power of Blommenstein Lake and two rivers that feed into the lake. It is studying the project’s potential environmental and social impacts to ensure it meets government regulations. Staatsolie expects the plant to be operational by 2015.

As Staatsolie aggressively moves forward with its 2020 plan, Waaldijk reflects on the program’s early victories and disappointments. He admits while there is much more to be done in the next nine years, he is encouraged by his loyal staff. The company has made investments in employee training and education and even achieved ISO 9001: 2008 certification. “At Staatsolie we have always worked according to plans, but these were relatively short-term plans,” he says. “We have boldly set a long-term goal for 2020. It is not easy, but because the goal is divided in phases, planning periods, it is manageable. It is just like taking the stairs, one step at a time.” EMI