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World banking on Guyana’s low-cost oil to meet future demands – Hess VP
Clare Gardner, Hess Vice President for Guyana & Suriname, Global Exploration (World banking on Guyana’s low-cost oil)
Kaieteur News- Clare Gardner, Hess Vice President for Guyana & Suriname, Global Exploration, has emphasised the importance of Guyana’s light-sweet crude for the future of global energy markets.
Recently, it was announced that the Stabroek Block partners have hit the target of 500 million barrels of oil produced from the block since production started back in December 2019. Hess, an American company holds 30% interest in that oil block that is estimated to hold 11.6 billion barrels of oil.
In a press release on the announcement of Guyana’s rapidly expanding oil industry achieving a significant milestone less than five years, Gardner said: “we are proud to be a partner in the successful development of this world class oil resource at an industry leading pace, cost and environmental performance.”
She added, “we look forward to continuing to work with our partners and the Government of Guyana to realize the full potential of the Stabroek Block for the benefit of the people of Guyana and all other stakeholders. The world will need these low-cost oil resources to meet future energy demand and help ensure an affordable, just and secure energy transition.”
From the 500 million barrels of oil produced, more than US$5.4 billion in oil revenues and royalties have been paid into the Guyana Natural Resource Fund (NRF). ExxonMobil Guyana Limited (EMGL) is the operator of the block holding 45% interest and the third partner is CNOOC Petroleum Guyana Limited, holds 25% interest. The 500 million barrels of oil was produced from the first three projects – Liza Phase 1, Liza Phase 2 and Payara are averaging more than 650,000 barrels per day (bpd) in production. The ExxonMobil-led consortium has plans in place to grow production capacity to more than 1.3 million bpd by the end of 2027, when they anticipate having all six projects up and running offshore. This will include the addition of the Yellowtail, Uaru and Whiptail projects.
FPSO Prosperity offshore Guyana
Kaieteur News had reported that according to the International Energy Forum (IEF) and S&P Commodity Insights – the cost to produce a barrel of oil in Guyana is among the lowest in the world. In the June 2024 report titled, “Upstream Oil and Gas Investment Outlook” it was stated, “The lowest cost supplies are from the Middle East, Guyana, and West Africa. The average weighted Middle East breakeven price is about US$30/bbl Brent, whereas Guyana is US$36/bbl and the average new well in the US requires about US$57/bbl. The highest end of the cost curve includes heavy crudes in Canada and Venezuela.”
Last month, Hess revealed that Guyana’s oil has been its top seller over the first nine months of 2024, fetching an average price of US$82.18 per barrel.
This figure, reported in Hess’s Q3 estimates highlights Guyana’s product as the company’s most valuable, outperforming other regions in Hess’s portfolio. Crude from Guyana’s prolific Stabroek Block showed steady gains, selling at US$80.41 per barrel on average in 2023, up to US$82.18 this year.
The third-quarter report highlights the global variance in crude oil prices, emphasizing Guyana’s significance in Hess’s international lineup. Crude oil from North Dakota in the United States averaged a selling price of US$73.47 per barrel, while offshore U.S. production sold at US$76.77. Meanwhile, Malaysia and the Joint Development Area (JDA) averaged US$81.35 per barrel.
It should be noted that despite slight fluctuations, Hess’s portfolio saw an overall increase in average selling prices from the previous year. For crude oil, the worldwide average price rose from US$75.72 per barrel in 2023 to US$79.14 in 2024. Excluding hedging, which provides a less buffered view of market dynamics, the average selling prices remained similar. Guyana’s crude maintained a robust US$82.18 per barrel, while Hess’s U.S. crude fetched an average of US$74.13, and Malaysia and JDA oil sold at US$81.35.
(World banking on Guyana’s low-cost oil to meet future demands – Hess VP)
(World banking)
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