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Hess shareholder profits jump by 14%
– as oil production in Guyana ramps up
Kaieteur News – Profits for shareholders of Hess Corporation have jumped by 14% since the second quarter of 2024.
CEO of Hess Corporation, John Hess
This was announced by the Board of Directors of the American company on Wednesday. The oil company, which has a 30% interest in Guyana’s prolific Stabroek Block said, “The dividend represents an approximate 14% increase compared to the dividend for the second quarter of 2024, which equals a 25 cent increase per share on an annualized basis.”
To this end, Hess explained the “regular quarterly dividend of 50 cents per share (is) payable on the Common Stock of the Corporation on September 30, 2024 to holders of record at the close of business on September 16, 2024.” In July, Hess announced an adjusted net income of US$809 million, or US$2.62 per share, compared with $201 million, or $0.65 per share, in the second quarter of 2023.
While Hess continues to boast of increased profits, Guyana’s earnings from the sector continue to pale in comparison. This is in part as a result of the lopsided 2016 oil contract, in addition to the refusal of the incumbent administration to renegotiate the agreement.
The increase in quarterly dividends to shareholders of the company, compared to the second half of this year comes on the heels of a revelation by the Government of Guyana (GoG) that the three Floating Production Storage and Offloading (FPSO) vessels that are producing oil in Guyana each underwent optimization works in the first half of this year to increase oil extraction.
According to the Mid-Year Report, the oil and gas sector is estimated to have grown by 67.1% in the first half of 2024, with total production reaching 113.5 million barrels during the period. Government reported that daily production in the Stabroek Block averaged 624,000 barrels per day (bpd) in the first half of this year, compared with approximately 380,000 bpd in the first half of last year.”
Further it was noted that the “higher-than projected production rates on the Prosperity FPSO” has resulted in a new production target this year of approximately 228 million barrels of crude oil for 2024. As such, the industry is now expected to grow by 56.4% this year, up from 44.7% projected at the time of preparing Budget 2024.
Government said, “At the project level, Liza Destiny, Liza Unity, and Prosperity, all underwent optimisation and topside debottlenecking activities in the first half of the year. The FPSOs produced at an average of 157,000 bpd, 245,000 bpd, and 222,000 bpd, respectively, while reaching the highest collective rate of 644,000 bpd in June 2024.”
Oil earnings
The total earnings from the export of crude oil amounted to US$9.4B in the first six months of 2024, a US$4B increase compared with the same period last year. It should be noted that 75% of that amount was deducted by the Stabroek Block partners to recover their investments. To this end, US$7.5B reflected cost recovery from the oil and gas sector. Meanwhile, Guyana’s Natural Resource Fund (NRF) received a US$1.2B top-up during the first half of 2024, including profits and royalty.
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