Denis Chabrol, Bloomberg News

GEORGETOWN
EnergiesNet.com 12 17 2024

Suriname’s Finance Minister Stanley Raghoebarsing said the government will pay oil royalties only to residents who have registered in the tax system as a way to reduce segments of the economy that aren’t taxed or subject to regulations. 

“To be eligible, one must be known and registered in the tax system, so the instrument will help formalize the huge informal sector,” he told Bloomberg News by phone.

The payment of royalties is expected to begin in mid 2028 when Total Energies starts production from the offshore Block 58. He said there would be an initial payment of $750 to each eligible person through their bank accounts and after that, there would be a 7% payout “only when” oil is lifted, sold and royalties paid, he said. 

The finance minister said there would be a cut-off point for eligibility which would be governed by either a law or presidential decree.

In contrast to Suriname, oil producing Guyana’s only criteria for distributing a nearly $500 cash grant is that the recipient must be 18 or older as of Jan. 1, 2025, and reside in Guyana. That payout, which has begun, is expected to conclude in another five months. 

When it comes to future borrowing, Raghoebarsing says Suriname is being cautious, as efforts are being made to further reduce the debt to gross domestic product ratio.

“We are keen in who we select to cooperate with. So, we are prudent when it comes to borrowing and loans,” he said. The current debt-to-GDP ratio is less than 90%, he added.

Raghoebarsing said over the past four years, Suriname reduced its debt-to-GDP ratio from 148%, and in an agreement with the International Monetary Fund, further slashed that number earlier this year.

bloomberg.com 12 16 2024