Oct 29, 2020 News
Kaieteur News – Chief Executive Officer of Hess Corporation, John Hess, recently revealed that the estimated recoverable resource discovered in the Stabroek Block has been revised upward to nine billion oil-equivalent barrels.
The previous estimate was eight billion barrels.
The revelation was made during Hess’ announcement of its performance for the third quarter of 2020, during which the company claimed a net loss of US$243 million due to the downward turn of the industry from the impact of COVID-19.
Yet, the company is not at all worried about that.
“We continue to execute our strategy and achieve strong operational performance while prioritizing the preservation of cash, capability and the long term value of our assets during this low price environment,” CEO John Hess said. He added, “Our differentiated portfolio of assets, including multiple phases of low cost Guyana oil developments, positions us to deliver industry leading cash flow growth and drive our company’s breakeven price to under $40 per barrel Brent by mid decade.”
It expects Guyana to drive its recovery. In spite of the loss incurred, Hess was keen to note that the company remains optimistic about a strong recovery thanks to discoveries offshore Guyana.
ExxonMobil –The Stabroek Block operator – has made 18 discoveries in the block.
The operator had announced discoveries at the Yellowtail-2 and Redtail-1 exploration wells. Yellowtail-2, the 17th discovery on the Block, encountered approximately 69 feet of high quality oil bearing reservoirs adjacent to and below the Yellowtail-1 discovery. Redtail-1, the 18th discovery on the Block, encountered approximately 232 feet of high quality oil bearing sandstone and is located 1.5 miles northwest of the Yellowtail discovery. It was in light of these discoveries that the estimate of gross discovered recoverable resources on the Block was increased to approximately nine billion barrels of oil equivalent resources.
Hess, which has a 25 percent stake in the Block, is happy to benefit from the world-class quality of oil, very low breakeven rates, and a lopsided production sharing agreement (PSA) which favours it and its partners.
Turning his attention to the corporation’s net production from the Liza Field, which commenced in December 2019, Hess said that this averaged 19,000 barrels of oil per day (bopd) in the third quarter of 2020.
During the third quarter as well, Hess said that the operator Esso Exploration and Production Guyana Limited continued work to complete the commissioning of the natural gas injection system that should enable the Liza Destiny floating production, storage and offloading vessel (FPSO) to reach its capacity of 120,000 gross bopd in the fourth quarter.
With regard to Phase Two of the Liza Field development, which will utilize the Liza Unity FPSO with an expected capacity of 220,000 gross bopd, Hess said that this remains on target to achieve first oil by early 2022.
The CEO also reminded that Hess had made the final investment decision to proceed with development of the Payara Field on the Stabroek Block after the development plan received approval from the government of Guyana. Payara will utilize the Prosperity FPSO, which will have the capacity to produce up to 220,000 gross bopd and will target an estimated resource base of approximately 600 million barrels of oil. First oil is expected in 2024. Ten drill centers are planned with a total of 41 wells, including 20 production wells and 21 injection wells. Excluding pre-sanction costs and FPSO purchase cost, the Corporation’s net share of development costs is forecast to be approximately $1.8 billion.
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