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Hess’ lifting cost per barrel in Guyana only $US7
…4 times cheaper than its US projects
Kaieteur News- The cost to produce each barrel of oil in Guyana’s Stabroek Block continues to stand out as one of the lowest in American oil major Hess Corporation’s global portfolio, with the 2024 average lifting cost per barrel about four times cheaper than similar operations in the United States.
Chief Executive Officer (CEO) of Hess Corporation, John Hess
According to Hess Corporation’s recently published 2024 Annual Report, Guyana’s average production (lifting) costs per barrel of oil equivalent (boe) stood at US$6.73.
In comparison, the company’s operations in North Dakota and offshore US fetched significantly higher costs at US$26.72 and US$25.88 per boe respectively. The total US average was US$27.11 per barrel, which is four times higher than Guyana’s rate.
The data also shows a consistent year-over-year decrease in Guyana’s lifting costs. In 2023, the cost per barrel in Guyana was US$9.60, while in 2022 it was US$11.23.
Hess explained that production (lifting) costs include the expenses incurred to pre-development costs from the operator for future phases of development and Hess’ internal costs.
The Stabroek Block
Guyana’s continued dominance in Hess’ global oil portfolio reflects the exceptional productivity of the Stabroek Block, where the company holds a 30 per cent stake. That block is operated by American oil giant, ExxonMobil Guyana Limited, which holds a 45% interest and a third partner, CNOOC, which holds 25% interest.
Globally, Hess reported a 2024 average lifting cost of US$17.08 per boe across all its operations, which further underscores the Stabroek Block’s position as the company’s most cost-effective producing project.
Notably, Hess is still in the midst of an acquisition by US energy giant Chevron, in a US$53 billion deal approved by Hess shareholders, but will be facing arbitration in court this May.
ExxonMobil and CNOOC filed for arbitration at the International Chamber of Commerce in Paris, arguing that they have a right of first refusal over Hess’ stake. Despite this, Hess expressed confidence that the merger would proceed as planned.
From the Annual Report, this publication reported that Guyana’s crude continues to take the spotlight in Hess’ portfolio. Guyana’s crude is Hess’ top-selling crude for 2024, fetching the highest average price among all its global operations. Crude oil from Guyana averaged US$80.04 per barrel, maintaining the lead in the company’s portfolio despite a marginal dip from US$80.72 in 2023 and US$89.72 in 2022. When excluding hedging, a strategy used to stabilise prices, Guyana’s oil still stood out with an average of US$80.04, outperforming barrels from the United States and Malaysia.
Hess Corporation’s average production (lifting) costs per barrel of oil equivalent produced
The Stabroek Block, located about 120 miles offshore Guyana, spans 6.6 million acres and is estimated to hold 11.6 billion barrels of oil. Production began in December 2019, following a discovery in 2015.
Currently, three Floating Production, Storage and Offloading (FPSO) vessels, the Liza Destiny, Liza Unity, and Prosperity, are in production, with another FPSO expected to come onstream later this year. The three active FPSOs collectively produce around 650,000 barrels of oil per day (bpd).
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