Sep 22, 2020 News
As a result of the economic pains unleashed on oil and gas multinationals and service companies during the COVID-19 pandemic, it is expected that some would take years to recover from the losses sustained. But this is certainly not the case for Hess Corporation which holds a 30 percent stake in the Stabroek Block.
According to the company’s Chief Executive Officer (CEO), John Hess, its interest in blocks offshore Guyana, will pave the way for it to see a 10 percent growth rate by 2023. Hess said that at the end of the day, it is the low-cost producer who wins while adding that the best rocks with the best returns will ensure some companies are well positioned for success after the pandemic.
The CEO said, “…We feel that our company with Guyana (which has) probably the largest oil discovery in the last 20 years, a world class resource with low breakevens costs and given our opposition in the Bakken, USA… we think we are in a strong position relative to competitors to provide industry leading cash flow growth.”
Hess added, “…Our cash flow compounds out to 2023 to 10 percent per year while the median of our peers actually decreases 10 percent a year. So we have raised the bar. And again, our 10 percent growth is competitive with big tech firms, big pharmaceutical companies and big consumer companies and so our value is unique…”
While the Stabroek Block consortium which includes ExxonMobil as the Operator and CNOOC/NEXEN, have already chalked up 18 massive discoveries, Hess Corp.’s CEO was keen to note that this is still the early innings for Guyana. The CEO said that Hess continues to see multibillion barrels of future exploration potential remaining on the block.
In providing an overview of the Guyana operations, he reminded that Liza Phase One, which is already producing oil, is expected to reach its peak production of 120,000 barrels of oil by month-end.
As for Liza Phase Two, Hess said that the Floating Production Storage and Offloading (FPDO) Vessel is on stream for its 2022 target. It is expected to produce 220,000 barrels of oil per day. As for the works on the Payara vessel, Hess said that this has been suspended pending government approval.
He is nonetheless optimistic that “technical issues” plaguing that process will be addressed and the partners will get the government’s blessing by month-end.
For future operations, the CEO said that the partners are looking at developing the Yellow-tail discovery as it is a large resource which consists of lighter crude. “…We are doing the pre-development work now to make that the fourth ship…”
Urau-1, the 16th discovery at the offshore deep-water Stabroek block, is likely to be developed to support a fifth drillship while the Turbot , ExxonMobil’s fifth oil discovery, is earmarked to support a sixth ship.
The potential, he said, also exists to develop Hammerhead, a heavy oil discovery, for a seventh ship. “…So there is the potential for seven ships but right now we are talking about five to bring on board, which will give you 750,000 barrels of oil by 2026,” the CEO concluded.
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