Aug 01, 2021 News
Kaieteur News – Hess Corporation’s Chief Executive Officer (CEO), John Hess is claiming that even as world leaders make big commitments to transition to renewable energy so as to achieve net-zero emissions by 2050, oil will still be needed along the way to meet global energy needs. This was made during his company’s 2021 Q2 Earnings call.
According to John Hess, the importance of oil to meet the energy demand of the future has been acknowledged by the International Energy Agency’s rigorous Sustainable Development Scenario which states that, assuming that all pledges of the 2015 Paris Agreement are met, oil and gas will be 46% of the global energy mix in 2040 compared with approximately 53% currently. Even in the IEA’s newest Net Zero Scenario, oil and gas will still be 29% of the energy mix in 2040. With the aforementioned in consideration, Hess said it is clear oil and gas will be needed for decades to come and will require significantly more global investment over the next 10 years on an annual basis than the US$300 billion spent last year.
This is where its interest in Guyana’s sweet, light crude plays a crucial role as the CEO said its investment in Guyana will help it to meet the dual challenge facing the world, that is to say, filling the oil supply gap and reducing emissions. To justify his position, Hess cited recent data from a Wood Mackenzie report which show that developments offshore Guyana, “are the highest margin, lowest carbon intensity oil and gas assets globally.” He further underscored his company’s confidence in Guyana saying, “Our strategy is to grow our resource base, have a low cost of supply and sustained cash flow growth. Executing this strategy has positioned our company to deliver industry leading cash flow growth over the next decade and has made our portfolio increasingly resilient in a low oil price environment.”
He added, “Our strategy aligns with the world’s growing need for affordable, reliable and cleaner energy that is necessary for human prosperity and global economic development. We recognise that climate change is the greatest scientific challenge of the 21st century and support the aim of the Paris Agreement and a global ambition to achieve net zero emissions by 2050.”
He said the key for his company in this regard is to have low-cost supply. By investing only in high return, low-cost opportunities, the best rocks for the best returns, he said Hess has built a differentiated and focused portfolio that is balanced between short cycle and long cycle assets. The Hess CEO has also commented on the massive importance of Guyana to the future operations for the company and has indicated that in time, it is almost inevitable that Guyana will become the most important operation for the company, “Guyana is our ‘growth engine, and the Bakken, Gulf of Mexico and Southeast Asia are our cash engines. Guyana is positioned to become a significant cash engine in the coming years as multiple phases of low cost oil developments come online, which we expect will drive our portfolio breakeven Brent oil price below US$40 per barrel by the middle of the decade…,” Hess said.
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