By Kiana Wilburg
The estimate of gross recoverable reserve of the Stabroek Block has now moved up to over six billion barrels, says Hess Corporation. This was noted during the firm’s earnings call which revealed details of its 2019 second quarter results.
According to the American company which has a 30 percent stake in the Stabroek Block, the oil-rich offshore concession continues to see multibillion barrels of additional exploration potential. Significantly, it noted that the upgraded estimate shows that Hess’ portfolio is on track to generate industry leading cash flow growth and increasing returns to shareholders.
With respect to developments on the block, Hess noted that the second phase of the Liza Field was sanctioned by its other two partners, ExxonMobil and CNOOC/NEXEN, following regulatory approval from the government of Guyana.
Hess noted that Liza Phase Two will utilise the Liza Unity FPSO, which will have the capacity to produce up to 220,000 gross barrels of oil per day. It said that six drill centres are planned with a total of 30 wells, including 15 production wells, nine water injection wells, and six gas injection wells.
The company noted that first oil is expected by mid-2022 and the development is expected to have a gross capital cost of approximately $6 billion, including a lease capitalisation cost of approximately $1.6 billion for the FPSO, and will develop approximately 600 million barrels of oil.
Excluding pre-sanction and lease costs, the corporation said its net share of development costs is forecast to be approximately $1.6 billion, of which $210 million is included in its 2019 capital and exploratory budget.
Turning its attention to Liza Phase One, Hess noted that this remains on track to achieve first oil by the first quarter of 2020. It said that Phase One will produce up to 120,000 gross barrels of oil per day at peak rates, utilizing the Liza Destiny FPSO, which is expected to arrive offshore Guyana in September 2019.
Further to this, Hess said that planning is underway for a third phase of development at the Payara Field, which is expected to produce between 180,000 and 220,000 gross barrels of oil per day with first oil as early as 2023.
Reminding of the exploration and appraisal activity on the Stabroek Block in the second quarter of 2019, Hess noted that the Yellowtail-1 well encountered approximately 292 feet of high-quality oil-bearing sandstone reservoir and is located approximately six miles northwest of the Tilapia discovery. As the fifth discovery in the greater Turbot area, it underpins another potential major development hub.
Further, Hess said that the Hammerhead-2 appraisal well, located approximately 0.9 miles from the Hammerhead-1 discovery well, and the Hammerhead-3 appraisal well, located approximately 1.9 miles from Hammerhead-1, were both successfully drilled and encountered high quality, oil bearing sandstone reservoir. Hess said that a successful drill stem test was also performed on Hammerhead-3. The appraisal results will be evaluated for potential future development the company asserted.
Additionally, it was noted that the Stena Carron drillship is currently drilling a second well at the Ranger discovery, while the Noble Bob Douglas and the Noble Tom Madden drill-ships are conducting drilling operations for the Liza Phase One development.
This newspaper understands that the Noble Tom Madden is next expected to drill the Tripletail exploration well, which is in the greater Turbot area, beginning this month.
Hess during the earnings call said that the operator, being ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), plans to add another drill-ship, the Noble Don Taylor, in the fourth quarter, bringing the number of drill-ships offshore Guyana to four.
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