Wednesday, August 10, 2022

Constructive relationship between Guyana and IOCs pushing rapid development of oil resources

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The Guyana government’s early approval in April of the US$10 billion Yellowtail Project is a testimony of the “constructive relationship” it has with the International Oil Companies (IOCs) operating at the Stabroek Block, says Hess Corporation’s Chief Executive Officer, John Hess.

Hess has a 30% interest in Stabroek Block with ExxonMobil as operator holding 45% and CNOOC holding 25%.

During his company’s first-quarter 2021 earnings call on Wednesday, Hess offered the foregoing comment in response to a participant’s question about the regulatory and financial rapport it shares with Guyana.

In terms of the Guyana government, Hess said, “Our company and our joint venture have an excellent working relationship, a very constructive one with the government. Testament is the early April approval of Yellowtail. The government has been very clear with us that they would like us as a joint venture to accelerate the development of their oil resources to basically improve the prosperity and have shared prosperity for all Guyanese citizens. So, it’s a very constructive working relationship. It continues.”

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The Chief Executive Officer said too that Hess wants to help the government in social responsibility as well, specifically as it pertains to making a better future for all Guyanese. “So, it’s an excellent relationship and we continue to work with them.”

He also noted that ExxonMobil has done an outstanding job on project management and execution, bringing a lot of value forward for its joint venture partners, for the people of Guyana and for shareholders in the excellent achievements made on the block. Hess said these include being ahead of schedule on Liza Phase 1, Liza Phase 2, and now ahead of schedule on Payara. “And that track record is really to the benefit of the Guyanese people as well as our shareholders,” the CEO added.

The Yellowtail development, Guyana’s fourth deepwater petroleum production project, is targeting 250,000 barrels of oil per day (bopd), the largest volumes yet for a single development offshore the South American country.

According to documents submitted to the Environmental Protection Agency (EPA) by ExxonMobil affiliate, Esso Exploration and Production Guyana Ltd. (EEPGL), the project will develop the Yellowtail and Redtail Fields, and potentially additional resources if determined to be feasible and competitive.

Yellowtail’s 250,000 bpd will add to the 140,000 bpd capacity from Liza Phase 1, 220,000 bpd from Phase 2 of the Liza Development and 220,000 bpd from Payara, ramping up total production to more than 800,000 bpd.

Yellowtail is expected to begin by Q4 2025 with an expected field life of at least 20 years.

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