Guyana has billions more barrels of undiscovered oil – Hess

Hess Corporation CEO John Hess
Hess Corporation CEO John Hess

Chief Executive Officer (CEO) of Hess Corporation, John Hess, a 30 per cent partner in Guyana’s world-class offshore Stabroek oil block, says the company continues to see billions more barrels of future exploration potential remaining, apart from the nine billion barrels already discovered.

Delivering remarks recently at Hess Corporation’s Fourth Quarter 2020 Conference Call, Hess noted “Guyana becomes a significant cash engine as multiple phases of low-cost oil developments come online, which we believe will drive our company’s breakeven price to under US$40 per barrel Brent and provide industry-leading cash flow growth over the course of the decade.”

“Our strategy has been – and continues to be – to grow our resource base, have a low cost of supply and sustain cash flow growth…our differentiated portfolio is balanced between short-cycle and long-cycle assets, with our focus on the best rocks for the best returns…the Bakken, deepwater Gulf of Mexico and Southeast Asia are our cash engines and Guyana is our growth engine,” the CEO declared.

Pointing to the preservation the long-term value of Hess’s assets and Guyana – with its low cost of supply and industry-leading financial returns, Hess emphasised that this remains the company’s top priority.

On the Stabroek Block, where Hess has a 30 per cent interest and ExxonMobil is the operator, 2020 was reported as another outstanding year with three oil discoveries during the year – at Uaru, Redtail-1 and Yellowtail-2 bringing total discoveries on the Stabroek Block to 18.

“The estimate of gross discovered recoverable resources on the block was increased to approximately nine billion barrels of oil equivalent, and we continue to see multibillion barrels of future exploration potential remaining,” the Hess CEO reiterated.

Other partners on the Stabroek Block are ExxonMobil, 45 per cent and CNOOC of China, 25 per cent.

Hess reported that in December, production from Liza Phase 1 reached its full capacity of 120,000 gross barrels of oil per day.

The Liza Phase 2 development is reportedly on track to achieve first oil in early 2022, with a capacity of 220,000 gross barrels of oil per day.

Hess noted the sanctioning of the third oil development on the Stabroek Block in September at the Payara Field as another key milestone of 2020. Payara will have a capacity of 220,000 gross barrels of oil per day and is expected to achieve first oil in 2024.

“Our three sanctioned oil developments on the Stabroek Block have breakeven Brent oil prices of between US$25 and US$35 per barrel – world class by any measure. Front-end engineering and design work for a fourth development at the Yellowtail area is underway and we hope to submit the development plan to the Government for approval before year end,” Hess told reporters.

The company also continues to see the potential for at least five Floating Production, Storage and Offloading (FPSO) vessels to produce more than 750,000 gross barrels of oil per day by 2026 – and longer term for up to 10 FPSOs to develop the current discovered recoverable resource base.

Hess will continue to invest in an active exploration and appraisal programme in Guyana in 2021, with 12 to 15 wells planned for the block.

The Hassa-1 exploration well recently encountered approximately 50 feet of oil-bearing reservoir in deeper geologic intervals. Although the well did not find oil in the primary shallower target areas, the Hassa well results confirm a working petroleum system and provide valuable information about the future exploration prospectivity for this part of the block. (Guyana Petroleum Digest)