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‘The real jewel in the crown is Guyana’ – Hess
Kaieteur News-Hess Corporation’s Chief Executive Officer (CEO), John Hess, has hailed Guyana’s Stabroek Block as the standout asset in the company’s global portfolio, describing it as the “real jewel in the crown,” during an interview.
He emphasised that the country’s offshore oil resources are central to Hess Corporation’s strategy of balancing short-cycle shale production with long-cycle offshore developments for sustainable growth.
“We have three ships on producing gross 660,000 barrels a day. We have the line of sight and sanctioned FPSOs going for another three that will take our gross production to 1,300,000 barrels a day in 2027,” Hess noted, referencing the company’s operations in the prolific Stabroek Block. Guyana’s crude has been Hess’s top seller over the first nine months of 2024, fetching an average price of US$82.18 per barrel.
Hess Corporation’s Chief Executive Officer (CEO), John Hess.
Hess highlighted that unlike U.S. shale, which he described as a mature industry with limited growth prospects, Guyana’s potential remains largely untapped and holds long-term value. He explained, “The inventory life of shale companies is 8 to 10 years… So I think it’s an annuity business now that provides very, very low growth.”
Guyana’s low cost of production and high-quality crude have made it an indispensable part of the company’s portfolio. Hess said this aligns with the company’s goal to “grow the resource, have a low cost to supply and deliver industry leading cash flow growth.”
With plans to bring additional production online through more FPSOs, Hess emphasized that Guyana’s resources are not just vital for Hess Corporation’s sustainability but also for meeting future global energy demands. “The oil is going to be needed because of depletion and also demand growth in the world, and they’ll still be room for OPEC as well,” he said.
The Stabroek Block which covers an area of 6.6 million acres is estimated to hold 11.6 billion barrels of oil. Hess is a 30% shareholder in the Stabroek Block which is operated by ExxonMobil and which holds 45%, and the third partner CNOOC, with 25%.
To date, Exxon has obtained approval from the Government of Guyana for six development projects in the Stabroek Block – Liza Phase One, Liza Phase Two, Payara, Yellowtail, Uaru and Whiptail. The first three projects are already producing oil at a daily estimated rate of 640,000 barrels per day (bpd). With the addition of Hammerhead and Longtail, Exxon said this will expand gross production in Guyana to approximately 1.3 million barrels per day, with total production capacity expected to reach 1.7 million barrels per day on an investment basis.
e Moreover, in October 2023, it was announced that American oil giant Chevron will be acquiring Hess Corporation for some US$53 billion. The takeover would give Chevron access to Hess’s most valuable asset in Guyana. However, Exxon and CNOOC filed for arbitration at the International Chamber of Commerce in Paris, arguing that they have a right of first refusal over Hess’s stake. The hearing is set for May 2025.
Exxon’s CEO Darren Woods has stated that the company wants to know the value of Hess’s 30% stake in the Stabroek Block in the US$53 billion takeover and also participate in the sale of Hess’s share in that block. Woods said, “We developed the value of that asset. We have the right to consider the value of that asset in this transaction, and then the right to take an option on it.” He added, “We have an opportunity, as does CNOOC, the other partner, to participate in that opportunity to have the right of first refusal.”
(‘The real jewel in the crown is Guyana’ – Hess)
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