Jul 06, 2019 News
By Kiana Wilburg
Even though the appraisal for several discoveries on the Stabroek Block indicate that there are over 5.5B barrels of oil equivalent reserves, Chief Executive Officer (CEO) of Hess Corporation, John Hess, says that his firm is excited about future prospects for the block.
In this regard, he said that Hess continues to see multibillion barrels of future exploration potential remaining on the block.
The CEO made this known at the Bernstein 35th Annual Strategic Decisions Conference that was held in New York.
Hess said the firm which holds a 30 percent interest in the Stabroek block also sees potential for not just three, but five Floating Production Storage and Offloading (FPSO) vessels to produce greater than 750,000 barrels of oil per day by 2025.
The CEO told investors who were present at the event that Hess’s cash flow and Cash Return on Capital Employed (CROCE), are expected to grow more than 250 percent through 2025. The official said that this makes Hess well positioned to return capital to its shareholders.
He said, “In summary, we are incredibly well positioned to deliver increasing and strong financial returns, visible and low risk production growth and significant future free cash flow. Very few oil and gas companies can deliver all three and we can.”
Furthermore, Hess Corporation’s 2019 Exploration and Production budget will see it expending over US$500M in the Stabroek block.
According to Greg Hill, Chief Operating Officer (COO) for Hess, 2019 will be the peak spend year for the Liza phase one development, which is on track for first oil by early 2020.
He noted, as well, that Hess is poised to begin the Liza phase two development spending, complete the plan of development for Payara, and advance front end engineering and design work for future development phases.
This newspaper understands that Hess has put aside US$260 million for costs associated with the Liza Phase One development offshore Guyana while its US$310 million budget includes spending for Liza Phase 2 development, the plan of development for Payara, and frontend engineering and design work.
The sum of US$440 million is also planned for drill exploration and appraisal wells on the Stabroek Block. Funds are also included for seismic acquisition and processing in Guyana, Suriname and the deep water Gulf of Mexico, and for other license acquisitions.
According to Environmental Protection Agency (EPA) documents, oil production from the Liza Phase Two Development is expected to last at least 20 years. ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) will drill approximately 35-40 wells offshore to support extraction of the oil from below the sea floor.
Each well will be drilled to a depth which is over 5,000 metres (m) below the sea floor. EEPGL will then install some of the oil production facilities on the sea floor at approximately 1500-1900 m (4900-6200 ft) water depth.
These subsea facilities include various types of pipes and hardware. The subsea facilities allow the oil from the wells to be gathered and moved to the surface of the ocean for further processing.
Kaieteur News understands that EEPGL will install other oil production facilities on an FPSO that will be moored on location in approximately 1,600 m (5250 ft) of water depth and will remain on location throughout the life of the facility.
Further to this, oil production facilities on the FPSO will further process the oil extracted from below the sea floor.
The FPSO will have the capacity to produce approximately 190,000 to 220,000 barrels of oil per day. During the early stage of production operations, the FPSO is anticipated to produce an average of approximately 5,700,000 to 6,600,000 barrels of crude oil per month.
At peak, EPA documents note that EEPGL will utilize approximately 1,200 personnel offshore during the stage where the wells are being drilled and the offshore oil production facilities are being installed. Kaieteur News understands that this number will decrease to less than 200 personnel during the production operations phase.
A smaller number of personnel will then be utilized at the onshore support facilities.
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