Oil Co. tells Investors to brace for more announcement on Guyana’s oil resources

Dec 01, 2022 News

Kaieteur News – Chief Executive Officer (CEO) of Hess Corporation, John Hess has told Investors to brace for a ‘major upgrade’ to the 11 billion barrels of oil equivalent resources discovered at the Stabroek Block.

During the recently held Bank of America Securities Global Energy Conference, Hess said ExxonMobil Corporation’s affiliate and operator of the block, Esso Exploration and Production Guyana Limited (EEPGL), marked nine significant discoveries for 2022 alone. These discoveries, namely at Fangtooth-1, Lau Lau-1, Barreleye-1, Patwa-1, Lukanani-1, Seabob-1, Kiru-Kiru-1, Sailfin-1 and Yarrow-1 wells, have yet to be appraised for the number of barrels they hold.

CEO of Hess Corporation, John Hess

The Hess boss said this ‘fantastic rate of exploration success’ especially at one of the most prime pieces of oil real estate is in keeping with the partners drive to grow future cash flow for shareholders.

Hess said, “If you are going to grow future cash flow then you need to grow your resource. We had our first discovery in 2015 and this is on an over 6 million acre block. We have 30 percent interest and Exxon has 45 with the remainder being held by our Chinese partner, CNOOC. We have had 29 significant discoveries and we had nine alone this year.”

The CEO added, “Our resource has been growing in Guyana. In fact, it moved from one billion barrels of oil equivalent to 11 billion. The nine discoveries this year are not in that resource base estimate so there will be a major upgrade to that number.”

Hess said he and the partners feel fortunate to be leading the production at the Stabroek Block since the discoveries offer a sweet combination of low cost barrels that are inextricably tied to a Production Sharing Agreement (PSA) that allows for fast recovery of expenses.

He said the partners already have four sanctioned projects from the Guyana Government and are looking to bring a fifth on board soonest. “What sets us apart from competitors is that we have a growing piece of real estate in Guyana, one that is the best the industry has seen this decade. We have seen fantastic exploratory results there and there is potential for doubling those finds. The partners are working aggressively to develop this world class resource,” the Hess Chief stated.

In terms of the state of play for its current projects, Hess said the Liza Phase 1 and Phase 2 developments are currently operating at their combined gross production capacity of more than 360,000 barrels of oil per day at the Stabroek Block.

The third development at Payara is on track to come online at the end of 2023 utilizing the Prosperity Floating, Production, Storage and Offloading (FPSO) vessel with a production capacity of approximately 220,000 gross barrels of oil per day. The fourth development, Yellowtail, is expected to come online in 2025, utilizing the ONE GUYANA FPSO with a production capacity of approximately 250,000 gross barrels of oil per day.

A plan of development is expected to be submitted to the Government of Guyana before year end for a fifth development, Uaru, which is expected to come online at the end of 2026 with a gross production capacity of approximately 250,000 barrels of oil per day. Hess has confidently told Investors on numerous occasions that it is poised to make a comfortable US$1B in annual profits from each ship.