…including holdings in Stabroek, Kaieteur blocks
American oil and gas company Hess Corporation, which has stakes in the Stabroek and Kaieteur Blocks, is planning to use the US$150 million it garnered from the recent sale of its Denmark subsidiary to bankroll its concessions offshore Guyana.
In a recent statement, Hess announced that it has completed the sale of Hess Denmark ApS to Ineos Exploration and Production AS for US$150 million. Hess Denmark ApS holds a 61.5 per cent interest in the South Arne Field in the North Sea.
The statement also included quotes from the company’s Chief Executive Officer (CEO), John Hess. According to Hess, the proceeds from the sale will go towards funding its oil exploration programme offshore Guyana.
“The sale of our Denmark asset enables us to further focus our portfolio and strengthen our cash and liquidity position. Proceeds will be used to fund our world class investment opportunity in Guyana,” the CEO said.
The Stabroek Block is 6.6 million acres (26,800 square kilometres). Exxon, through subsidiary Esso Exploration and Production Guyana Limited (EEPGL) is the operator and holds 45 per cent interest in the Block. Hess Guyana Exploration Ltd holds 30 per cent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
Meanwhile, the Kaieteur Block has EEPGL as the operator of the block with a 35 per cent stake, while Ratio Petroleum Energy owns 25 per cent, Cataleya Energy Limited (CEL) has 20 per cent, and Hess holds a 20 per cent stake in the Kaieteur Block. Westmount Energy owns stakes in Ratio (0.7 per cent) and Cataleya (5.4 per cent).
Hess increased its shares in the Kaieteur Block only a few months ago following a farm down of 5 per cent working interest by Cataleya Energy. The Houston-based oil company formerly had a working interest of 15 per cent in the Kaieteur Block.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027, with developmental drilling recently starting on the second one, the Liza Phase 2 project. Back in May 2019, EEPGL was granted approval by the Environmental Protection Agency (EPA) to go ahead with its Liza Phase 2 Development offshore Guyana.
The oil company had said that the project will have the capacity to produce 220,000 barrels of oil per day. Exxon had also revealed that the Liza Phase 2 development was funded at the cost of some US$6 billion, including a lease capitalisation cost of approximately $1.6 billion, for the Liza Unity Floating Production Storage and Offloading (FPSO) vessel. For the Phase 2 Development, six drill centres were planned, along with approximately 30 wells – 15 production, nine water injection and six gas injection wells.
The US$9 billion Payara development, the third development, will meanwhile target an estimated resource base of about 600 million oil-equivalent barrels and is considered to be the largest single investment in the history of Guyana.
A fourth project, Yellowtail, has been identified within the block with anticipated start-up in late 2025 pending Government approvals and project sanctioning. This project will develop the Yellowtail and Redtail fields, which are located about 19 miles (30 kilometres) southeast of the Liza developments.
The Prosperity FPSO vessel will be designed to produce 220,000 barrels of oil per day, will have associated gas treatment capacity of 400 million cubic feet per day and water injection capacity of 250,000 barrels per day. They further explained that the FPSO will be moored in water depth of about 1900 metres and will be able to store around two million barrels of crude oil.
The construction of Prosperity’s hull started in January 2019. Prosperity will be Guyana’s third FPSO. The Prosperity FPSO is expected to be deployed at ExxonMobil’s Stabroek Block offshore Guyana, as part of the Payara oil field development.