Suriname has higher royalty and profit sharing than Guyana, but no oil production

Dear Editor,
A recent visit to Suriname heard complaints by politicians, businesspersons, and the public about the terrible state of the economy, and how Guyana is doing financially better in oil production and in its monetary proceeds.
After more than a decade of poor governance, the present Surinamese Government had pinned its hopes on turning around the economy on oil production, but faces delayed production of oil and gas. First oil in Suriname is projected in 2027, even though discovery of oil in Suriname predates Guyana’s.
Unlike in Guyana, Suriname has, over the last four years, faced a financial crunch. In multiple trips I had undertaken there over the last two years, the Surinamese people complained about the state of the economy and the high cost of living. President Chandrikapersad Santokhie had a most difficult task to steady the ship, and the economy only now seems to be on a mend, to enable the reversal of a decade of poor governance under his predecessor, Desi Bouterse.
Lack of oil revenues has hurt Suriname’s developmental plan, and Santokhie’s re-election prospect in May 2025. Lack of oil production has severely handicapped planned economic development and growth, in addition to weakening the external accounts of the country and its debt rating and ability to borrow money, which is in short supply.
Unlike Suriname, Guyana started producing oil since late 2019, starting with 100K barrels a day; which is now at about 640K. Critics of Guyana’s oil production and Exxon investments point to Suriname’s higher royalty (6.25%) as opposed to Guyana’s 2%; lower (60%) cost recovery, as opposed to Guyana’s 75%; 20% profit sharing, as opposed to Guyana’s 12.5%; and higher bonus signing incentive. Guyana got US$18M in bonus, and Suriname got double that.
Suriname has not produced a single barrel of oil, and has not earned a dollar from oil production, whereas Guyana has earned billions. Suriname’s oil production has been deferred until 2027. With election in May 2025, President Santokhie has no windfall to ride on in his campaign. Critics are reminded that in mathematics, 6.5% of zero royalty is zero; and the same applies to 20% of zero profit sharing.
Meanwhile, Guyana has earned several billion American dollars as royalty and profit sharing over the last five years. Clearly, Guyana is financially much better off than Suriname, which has better terms of oil production from investors. It does not mean that the terms signed in the agreement with Exxon are ideal, but, compared with Suriname, Guyana is much better off today than it was five years ago, when it had no revenue stream from oil.
Those who advocate against oil production and/or object to expediting and increasing it are on the wrong side of energy development. Guyana should, and must, maximize oil and gas production because of an expected decrease in use of fossil energy that would lead to lower prices.
Currently, Guyana’s oil fetches about US$80 (varies over time) per barrel. Oil has stabilized our foreign exchange reserves, and has enabled us to purchase foreign products – a situation which is relatively good in comparison to Suriname and neighbouring countries. Massive investments come with oil income, as observed all over the country.
Guyana has been attracting more oil investment than Suriname, as well as more foreign direct investment and, obviously, more income or revenue; and there is job creation from overall investments. It is not known why this is the case, when Suriname’s economy was doing much better than Guyana’s prior to oil production.
Also, oil companies (Chevron and others) don’t seem to be in a hurry to produce oil in Suriname. It is unknown why there is a delay in oil production in Suriname, whereas Guyana’s was fast-forwarded much sooner than expected; beginning in December 2019 rather than in 2020. Is it because Guyana offers oil companies better investment opportunities and benefits than Suriname?
In economics and international business, capital follows locations where cost of doing business is minimal, and where return on investment is maximum. Guyana seems to be offering better terms on oil investment than Suriname, and therefore oil development momentum is on the side of Guyana for now, unless another country offers better terms.
Therefore, Guyana should maximize its production of oil and gas.

Yours truly,
Vishnu Bisram