May 07, 2021 News
…as Yellowtail is confirmed as fourth oilfield —Hess
Kaieteur News – Guyana is poised to be a “cash engine” for US-based oil exploration and production company, Hess Corporation, as the Yellowtail discovery in the Stabroek Block has been confirmed as the fourth oil field for development in the prolific contract area, the first three being Liza Phase I, Lisa Phase II, and Payara. The position was made recently, when the ExxonMobil Stabroek Block partner, Hess, in its first quarter report for the year, announced that startup for the new producing field is pegged for 2025.
With advanced plans underway for three developments and another slated for startup in 2025, Hess Corporation’s Chief Executive Officer (CEO) John Hess told investors, “Guyana is positioned to become a significant cash engine as multiple phases of low cost oil development come online.”
Hess added, “we’re nearing work for Yellowtail and a fourth development on the Stabroek Block is underway with startup in 2025.” This, he cautioned however, would be pending government approvals and sanctions.
With the Liza I oilfield already in production, the oil executive noted that the Liza Phase II development is on track to achieve first oil in early 2022 with a capacity of 220,000 gross barrels of oil per day. According to Hess, “our third oil development on the Stabroek Block at the Payara Field is expected to achieve first oil in 2024, also with the capacity of 220,000 gross barrels of oil per day.
He projected too that, “we continue to see the potential for at least six FPSOs (Floating Production Storage and Offloading Vessels) on the block by 2027.”
According to Hess, in longer term, this would mean the partners are projecting up to 10 FPSOs to develop the discovered resources on the Block. Guyana, he said, is such that “the payouts are very quick and returns are very high so we are going to be bringing value forward.”
Speaking about the most recent discovery in the Stabroek Block at the Urau-2, it was noted that the appraisal is showing very encouraging results. According to Hess, the discovery has “excellent reservoir characteristics, you have high quality oil.”
He noted too that given the proximity of the Urau 1 well and the Urau 2 well, 6.8 miles apart, “it shows the potential for large aerial extent of a highly prolific quality reservoir.”
Speaking about the returns being had from the operations, Hess noted that those from the Stabroek Block are expected to “drive our portfolio breakeven Brent oil price below $40 by the middle of the decade.”
Accordingly, Hess reported that, “as our portfolio generates increasing free cash flow, we will first prioritise debt reduction and then cash returns to shareholders.” Given the prospects and planned activities in the Stabroek Block, he noted that more than 80 percent of “this year’s capital spend is allocated to Guyana where our three sanctioned oil developments have a breakeven oil price of between $25 and $35 per barrel.”
According to Hess, “to date with gross discovered recoverable resources of approximately nine billion barrels of oil equivalent, and we continue to see multi-million barrels of huge exploration potential remaining.”
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