Open door policy for hydrocarbon licensing adopted by Suriname would further boost to the upstream oil and gas sector, thereby benefiting both investors and the country, according to a report from GlobalData.

The new policy was announced to attract investments in exploration and development of hydrocarbons sector in the country, as the previous licensing round in 2014/2015 ended up selling only one block.

Much of Suriname’s offshore hydrocarbon reserves are in deep water areas which require higher cost and the cost could escalate if the reserves are similar to the high-pressure/high-temperature reservoir conditions found in Guyana.

Despite having early discoveries in the 1960s, Suriname’s upstream sector is still in the early stages and favourable fiscal terms are required to support high-cost developments.

In the report ‘Suriname Upstream Fiscal and Regulatory Report – Open Door Licensing Adds Flexibility to Attractive Regime‘, the analysts said that Suriname may further continue its favourable fiscal term to attract fresh investments into the sector.

Although attractive fiscal terms are well placed for Suriname compared to its regional peers, low oil prices and high risk associated with exploration are restricting the interest.

The new policy, however, will now allow the companies to negotiate different contract terms based on the various situations, such as low prices or complex development.