Suriname’s state-owned oil company, Staatsolie,m has signed a deal with Petronas and ExxonMobil to extend exploration of a gas discovery off the coast of Suriname in addition to considering the potential of a floating LNG project.

The gas discovery was made in 2020 at offshore Block 52 but was initially deemed commercially unattractive.

Staatsolie said in a statement that, following talks with Petronas, the companies have committed through a letter of agreement to further explore the Sloanea-1 discovery and make feasible the development of a commercial gas field in Block 52.

“A key component of feasibility is the guarantee of a tax-free period of 10 years from the start of production. This is also stipulated in the letter of agreement, with government approval,” Staatsolie added.

Zamri Baseri, the head of Petronas in Suriname, stated in January that the US should offer more incentives for energy companies looking to develop oil and gas discoveries.

In December, Petronas signed additional production sharing contracts with Staatsolie for offshore blocks 63 and 64 after winning the areas in a bidding round.

The Sloanea-2 appraisal well, including a production test, is set to be drilled in 2024.

According to Staatsolie, after the Sloanea-2 appraisal well is drilled, it will be determined whether a commercial gas field is feasible. If so, the earliest gas production would be around 2031. The parties are also considering the possibility of a floating liquefied natural gas plant for the project.