Suriname state oil company Staatsolie on Oct. 13 said it had signed a 30-year production sharing contract with U.S. producer Chevron Corp. for the South American country’s offshore Block 5.

Chevron Exploration Suriname Ltd. and a consortium by TotalEnergies and Qatar Petroleum in June submitted favorable bids for shallow-water exploration in Blocks 5, 6 and 8 in an auction by Staatsolie following a string of oil discoveries.

The production sharing contract (PSC) gives exploration, development and production rights to Chevron Exploration Suriname. Staatsolie can opt for a 40% share of the project during its development phase.

“Staatsolie is excited to have been able to add another major player in the oil industry to its list of operators. These parties have resources and systems in place to maximize the opportunity for development,” the company said in a release.

Chevron, which agreed to pay a signing bonus of $30.88 million, is expected to cover the block’s exploration costs in a first phase that will last six years, Staatsolie said.

“[This is] a nice windfall for a country that is having a pretty hard time right now,” said Staatsolie Managing Director Annand Jagesar in an interview with a local radio station.

Suriname’s shallow-water area covers 120 km from the coast at a depth of up to 100 m. Block 5, located in the area’s west, covers 2,235 sq km.

Offshore