Latest update November 8th, 2024 1:00 AM
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Hess puts up US$450M for exploration and appraisal wells on Stabroek, Kaieteur Blocks
Hess Corporation, one of the Stabroek Block partners alongside ExxonMobil and CBNOOC/NEXEN, has put forward a US$3 billion exploration and production capital budget for 2020. According to the American oil company, more than 80 percent of the budget will be allocated to high return investments in Guyana as well as its project at Bakken in the USA.
Hess Corporation CEO, John Hess
In its breakdown, Hess noted that US$450 million has been budgeted to drill exploration and appraisal wells on the Stabroek and Kaieteur Blocks offshore Guyana, while two exploration wells will be drilled in the Gulf of Mexico. It also stated that funds are included for seismic acquisition and processing in Guyana, Suriname, and the deepwater Gulf of Mexico, and for license acquisitions.
In addition to this, US$100 million was budgeted for the Liza Phase One development where first production was achieved in December 2019. And US$400 million was set aside for the Liza Phase Two development, where first production is expected by mid-2022.
Kaieteur News understands that US$360 million will go towards development plans for the Payara Field, where production is expected as early as 2023, and for front end engineering and design work for future developments.
Overall, the company said that the $3.0 billion budget is allocated as follows: $1.69 billion (56%) for production, $860 million (29%) for offshore Guyana developments and $450 million (15%) for exploration and appraisal activities.
Following the recent release of the budget details, Chief Executive Officer (CEO) of Hess Corporation, John Hess said, “We continue to successfully execute our long term strategy, with the majority of our capital budget directed to Guyana and the Bakken — two of the highest return investment opportunities in our industry that will become significant, long term cash generators for our company.”
The CEO added , “We are well positioned to deliver industry leading cash flow growth while also achieving significant reductions in our unit costs, which will drive margin expansion and lower our breakeven oil price to below $40 per barrel Brent by 2025.”
In his brief commentary, Chief Operating Officer (COO) for Hess, Greg Hill, said since Liza Phase One development is now on production, focus in 2020 will be on the Liza Phase Two development and on front end engineering design work to develop the Payara Field.
Hill said that Hess will also continue to invest in an active exploration and appraisal programme in Guyana on both the Stabroek and Kaieteur Blocks and in the deepwater Gulf of Mexico.
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