Suriname's state-owned oil business, Staatsolie, has launched negotiations with oil majors Exxon Mobil (NYSE:XOM) and TotalEnergies (EPA:TTEF) to encourage collaborative exploitation of natural gas resources that cross its and Guyana's maritime borders, the president of the national oil firm told Reuters late Tuesday.

The preliminary conversations are part of Suriname's efforts to attract foreign investment in its energy output and transform the South American country into a regional gas center. It will not begin large offshore oil production for another four years.

To Suriname's west, an Exxon-led consortium in Guyana has rapidly increased oil output to approximately 650,000 barrels per day (bpd). The group is in contact with the Guyanese government about developing previously untapped gas resources. Guyana has stated that it wants the consortium to use the fields for internal and export purposes, as well as to produce a second source of energy money for the country.

The Exxon group has announced six projects in Guyana, where it has confirmed approximately 11 billion barrels of recoverable resources, primarily for the production of more profitable crude oil. A seventh project could be the group's first to focus primarily on gas.

Two of Exxon's Guyana finds, which include primarily natural gas and gas condensate, are close to two Suriname fields where TotalEnergies and APA Corp discovered gas, according to Staatsolie Managing Director Annand Jagesar in an interview at the CERAWEeek energy conference in Houston.

"We've been discussing with Total. They don't envision a viable project in Maka and Kwaskwasi (two discoveries off its coast). Jagesar stated that by joining the Guyana and Suriname explorations, our initiatives can reach that scale.

Differences in taxation and other fiscal issues between the two countries are also among the obstacles that must be overcome before any cooperative gas development can take place, he stated.

Exxon and TotalEnergies' spokespersons declined to comment.

Even though the first project in Suriname planned to begin offshore extraction, TotalEnergies and APA's Block 58, will initially focus on oil, the country sees itself as a potential gas hub in the region.

"There is a golden lane," Jagesar added, referring to the Equatorial Margin, a belt of offshore oil and gas potential that runs from Brazil to Guyana. "The sweet place is in Guyana; it's the best reservoir... "It appears we have more gas," Jagesar stated.

TotalEnergies and APA plan to make a final investment decision on developing Block 58 later this year, with the goal of producing oil by 2028. However, Jagesar believes that as drilling costs have risen globally, the project's anticipated $9 billion price tag may climb.

"Drilling cost about $200,000 per day two years ago. "Now it's around $400,000," he said.

The next project to begin offshore production could be Block 52, where Malaysia's national oil giant Petronas and partner Exxon intend to do additional exploration. Jagesar stated that they want to drill an appraisal well and conduct production testing.

Petronas may develop a liquefied natural gas (LNG) project using Suriname's gas if discoveries permit. Petronas and Staatsolie have agreed to exceptional fiscal terms through a contract modification, granting the firm a ten-year tax-free period from the start of production. According to the executive, these conversations could be expanded to include additional companies.

Big producers from nearby nations, such as Brazil's Petrobras, are looking into potential in Suriname, said Joelson Mendes, the company's exploration and production chief, on Wednesday. Suriname has negotiated production sharing contracts in shallow waters with companies like as Chevron (NYSE:CVX) and QatarEnergy for four blocks.

According to Jagesar, the total number of blocks allotted may climb to 21-22 as a result of a recent bidding round.