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Nothing in the industry competes with the Stabroek Block- Hess CEO
According to the Chief Executive Officer (CEO) of Hess Corporation, John Hess, there is no other oil concession in the petroleum industry which stands to compete with Guyana’s crown jewel, the Stabroek Block.
During Hess’ second quarter earnings call on Wednesday, the company indicated that it found an additional two high-quality reservoirs in the Stabroek Block—specifically in the area Yellowtail field. Hess Corp highlighted that these reservoirs, one adjacent to and the other below the Yellowtail Field further demonstrate the world class quality of the basin.
Considering that Yellowtail is now expanding and seemingly exceeding expectations, thereby jumping ahead of Hammerhead in the line, a question was posed to the CEO about whether this progression could support selling down an interest in the lower quality Guyana assets.
Hess indicated that his company is always looking to optimize the value of their portfolio, but one of the lowest cost, highest return investments in the industry is Hess’ position in Guyana. He further explained that the company sees a lot of more “running room” in Guyana and that he anticipates more of it.
“So, no” the CEO replied, “we don’t have any interest in selling down. So high returns and low cost. Nothing competes with it in the industry.”
Stabroek Block
ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) is the operator with 45 percent interest. Hess Corporation’s local subsidiary, Hess Guyana Exploration Limited, holds a 30 percent interest. CNOOC International Limited’s local subsidiary, CNOOC Petroleum Guyana Limited, holds 25 percent.
The current estimate of gross discovered recoverable resources for the block stands at more than 8 billion barrels of oil equivalent, with multi billion barrels of exploration potential remaining. In June, Hess resumed a four-rig drilling operation, with two of the rigs focused on development wells and two on exploration and appraisal activities. The Liza Phase One development, which has an estimated breakeven price of $35 per barrel Brent, achieved first production in December and is now expected to reach its full capacity of 120,000 gross barrels of oil per day in August.
The Liza Phase Two development with an estimated breakeven price of $25 per barrel Brent and production capacity of 220,000 gross barrels of oil per day, remains on track for an early 2022 start-up.
The CEO noted that the development of the Payara field with a production capacity of 220,000 gross barrels of oil per day has potentially been deferred six to 12 months, pending government approval to proceed.
Planning for the fourth and fifth Floating Production and Storage Offloading (FPSO) vessel is underway, the CEO said, which will be further optimized by this year’s exploration and appraisal drilling results.
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