Category: Operations

By Işıl Güneş PARAMARIBO, SURINAME – When offshore oil is discovered, the first question for Surinamese citizens is often simple: what will they get out of it? Local content has become the shorthand answer for every country. It refers to jobs for nationals, contracts for local businesses, and training that builds long-term capacity.  For Suriname, about to take the step from exploration to production, the scope and implementation of local content are yet to be fully defined. Elements already exist in law and contract. What remains unresolved is how far the country wants to go, how prescriptive the framework should be and who ultimately qualifies as ‘local’. The Petroleum Law of 1990, enacted in 1991 (S.B. 1991 no. 7), lays out ownership, licensing and Staatsolie Maatschappij Suriname N.V.’s authority, but does not prescribe quotas or targets for local employment or procurement. Articles 17.1 and 17.2 provide that contractors shall, “to the extent possible”, give priority to the employment and training of Surinamese nationals and to the use of goods and services available in Suriname, leaving implementation to contractual arrangements rather than statutory mandate. So, Staatsolie and its subsidiary, the Staatsolie Hydrocarbon Institute (SHI), exercise contractual power to weave these requirements into Production Sharing Contracts (PSCs). In practice, this means local content is enforced through negotiated clauses rather than fixed statutory percentages. Article 32.3.1 of the Staatsolie’s Model PSC requires that: “Contractor shall give priority to the employment of nationals of Suriname who have the required qualifications and experience.” In the same way as giving priority to the employment of Surinamese nationals, it encourages preference for the local firms.  Article 32.4 suggests: “Contractor and its Sub-Contractors shall, to the greatest extent possible, give preference to local firms in Suriname…by including weighting on local value added in the tender evaluation criteria.” Article 32.5 mentions training of nationals: “Contractor shall use its best efforts to train nationals of Suriname… Cost for such training pursuant to this Article shall be considered as cost recoverable.” Therefore, companies must actively seek out Surinamese suppliers and invest in training local workers, with the assurance that training expenditures can be counted as recoverable costs. The PSC also obliges contractors to report annually on local content performance and present a plan to increase it year by year. This contract-based model has advantages. It gives Staatsolie flexibility to negotiate obligations depending on the block, the operator and the stage of activity. For a frontier basin like Suriname’s, that flexibility helps attract investors by avoiding hard quotas that might scare off exploration. But the trade-off is a lack of uniformity: each contract can look slightly different and enforcement relies heavily on Staatsolie’s capacity to monitor compliance. Contrast this with Guyana, which in 2021 passed a Local Content Act that establishes clear definitions of “Guyanese companies” and “Guyanese nationals,” sets minimum thresholds across sectors, and creates a Local Content Secretariat with enforcement powers. The law sets out minimum quotas. For example, 90% of office staff must be Guyanese, 95% of security services, and 50% of equipment rental services. It also prescribes categories for goods and services that must be sourced locally, with strict reporting obligations and penalties for non-compliance. The Act sits alongside Production Sharing Agreements (PSA), including ExxonMobil’s 2016 PSA, which contained relatively light local content language by comparison. In effect, Guyana moved from contractual encouragement to statutory obligation. The law removed the choice of operators and transferred it to regulators. Suriname has so far relied on the opposite model: strong contractual provisions without a binding statute. Staatsolie Managing Director Annand Jagesar has repeatedly stated that a rigid local content law is not strictly necessary if contractual obligations are enforced properly and local capacity is allowed to grow organically. The emphasis, in his view, has been on competitiveness, readiness and avoiding artificial bottlenecks. However, the political position is changing. This year, President Jennifer Geerlings-Simons publicly announced her intention to enact a dedicated local content law, with timelines pointing toward 2026.  In the absence of a binding law, international operators in Suriname have developed internal local content policies aligned with the PSC. These typically include supplier registration portals, workforce development initiatives and training partnerships. For example, Staatsolie and industry partners developed the Blue Wave Supplier Development Program aiming to train and develop the local suppliers. Similarly, TotalEnergies and industry partners launched the EnergyJobs.sr portal to connect Surinamese jobseekers with job opportunities in the energy sector. One issue is also who is considered local: Suriname has a large diaspora, including many people of Surinamese origin who hold foreign passports but maintain strong economic and professional ties to the country. Under a rigid nationality-based definition, they risk exclusion.  Local content expert Anne-Rita Wijdh, in an interview with OilNOW, argued that for a small country, exclusionary definitions are counterproductive. In her view, local content should be anchored in residency, contribution and tax presence rather than passport alone, allowing Suriname to leverage its full human capital base. The rules of the game are therefore partially written. Still, the challenge is not only in writing clauses but in making them work on the ground. Can Suriname’s construction firms, logistics companies or fabricators scale up in time? Will training programs produce enough welders, engineers and safety officers by 2028, when first oil is expected from Block 58’s GranMorgu project?  As the debate over a stand-alone Local Content Law intensifies, proponents argue that legislation would provide certainty and guarantee national benefits, while skeptics caution that rigid quotas could outpace local capacity. Whatever framework is adopted, its credibility will rest less on ambition than on enforcement, with or without a new law. Source: https://oilnow.gy/rules-of-the-game/local-content-in-suriname-what-the-law-already-says-and-what-to-expect-next/