Mr. Tjon Kie Sim

P.O.Box 4069 Flora

Paramaribo

Suriname

Subject

TNO-Staatsolie Co-operation

Please allow me to introduce our Institute to you and to discuss our special relationship with Staatsolie Maatschappij Suriname N.V.

The Netherlands Institute of Applied Geoscience TNO is the country's premier public knowledge centre on all subsurface issues related to the oil and gas exploration and production industry. We have conducted a variety of technical co-operation projects with commercial oil companies, national oil companies and governments, both in Europe and overseas. We are specialised in tailoring technological solutions to the particular circumstances of our clients, whether they are technologically advanced or only just beginning in the highly competitive E&P arena.

From 1989 onwards, the Netherlands Institute of Applied Geoscience TNO has developed a long-term, intensive relationship of technical assistance, initially through Dutch development aid, but gradually sponsored directly by Staatsolie. The technical co-operation has primarily been focused on Staatsolie's Exploration and Reservoir Engineering division, with many interfaces to other departments such as Information Technology, Drilling, Production and Staatsolie's management board. Over the years, TNO has obtained an in-depth understanding of the internal and external constraints governing Staatsolie's business processes. Indeed, through our many discussions and hands-on work with Staatsolie's staff and management, we had the privilege to contribute our share in tailoring Staatsolie's business processes to Surinam's particular circumstances. Our aim has been to assist Staatsolie in what may be called "institution building", i.e. gradually developing an integrated, modern and durable infrastructure of data, tools and know how. Achieving this in a country like Surinam is certainly a challenge and can only succeed with a motivated staff and with visionary leaders.

The oil exploration and production industry is a highly technological and knowledge-intensive business. Provided that one has the capital, it is easy to buy expensive equipment and services, but very difficult to apply them in the most cost-effective way. To optimise the field production operations and the associated production infrastructure, to plan this well in advance and mobilize the required capital and human resources, demands management skills that are not easily obtained.

The particular constraints that Staatsolie's management had been facing could easily have led to being trapped in the well known vicious circle of "cash-constrained" and "Knowledge-constrained" companies; if you have to knowledge you can't generate cash, if you have no cash you can't generate knowledge. And if moreover a state oil company has wider objectives than its immediate business concerns, putting additional constraints on its mode of operation, then the required management skills become even rare. This is especially true for development countries without a well-established knowledge and institutional infrastructure. It is in this respect that TNO has developed a high esteem for Mr. Jharap, who not only succeeded in mobilising the required capital and human resources, but did so in a cost-efficient way with due regard both for Staatsolie's immediate business needs and the wider country interests.

Clearly, his wider objectives are to contribute to creating a skilled work force for the country's long-term benefit. Moreover, he understands very well that in order to optimally control Suriname's oil resources for the good of the country the primary condition is to develop in-house an adequate technical, financial and managerial knowledge of the E&P industry. We all know that competing in today's global economy can only succeed through knowledge. The Netherlands Organisation for Applied Scientific Research TNO has been established exactly for that reason and has ample experience in rendering their clients more competitive. Surinam is no exception to this rule. Mr. Jharap's vision to apply this rule to his country has been the basis for the success of Staatsolie and is the best guarantee that the country will optimally benefit from its oil resources.

TNO considers it a privilege to co-operate with Mr. Jharap and his staff and to make a contribution to the national oil industry of Suriname. We hope to continue our support to Staatsolie and hope that the dream of Mr. Jharap and his staff will come true.

We wish Staatsolie all the best in strengthening and expanding their knowledge for the long-term benefit of Suriname.

Netherlands Institute of Applied Geoscience TNO

National Geological Survey

Ir. J.Ridder

Deputy-director

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Cc. - Mr. S.E.Jharap