20% relinquishment of Stabroek Block will have no impact on future plans – Hess CEO

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Hess Corporation, a 30% stakeholder in Guyana’s Stabroek Block, has assured the market that the co-venturers stand ready to comply with the relinquishment provisions in the 2016 Production Sharing Agreement (PSA). The company also told shareholders that the 20% portion to be returned to the State, would not affect the exploration or production agenda.

This was specifically noted by Chief Executive Officer (CEO), John Hess at the 51st Annual Scotia Howard Weil Energy Conference held on March 8, 2023.

Hess at the event addressed two major issues on the subject of relinquishment. The CEO said the government is in no way forcing the release of the block, as suggested in some international reports he has seen. He clarified that the terms of the PSA require that after a certain time has passed, a portion of the acreage has to be given up. “So it is a normal course of business,” Hess said.

He further clarified that the portion of the block to be returned to Guyanese authorities would not affect the partners’ exploration or production plans which include having a one million barrels per day output by 2027. 

The Hess boss said, “There is some talk on potentially, having been with Vice President (Dr. Bharrat) Jagdeo at CERAWEEK in Houston, that the 2023 date might be a 2024 date (for relinquishment) so we will see. But at the end of the day, our joint venture is fully prepared to release that 20%.”

He said it is important for shareholders to know that the 20% is not going to be in the prospective area. Hess said, “It is not going to be where we have exploration planned or future exploration planned and it is not going to be where we have the developments in production.”

Guyanese authorities have said that the 20% portion would form part of a pool of offshore concessions to be considered in bilateral talks for energy cooperation. India, Qatar, the United Kingdom, and Brazil are in the cue for possible discussions. If these talks do not bear fruit, the government has said the acreage will be placed into the nation’s second bidding round.

The Hess CEO reminded that ExxonMobil Guyana (45% interest) which is the operator of the Stabroek Block already has four sanctioned projects, adding that the fifth at Uaru is awaiting the relevant approvals. In the meantime, he said there are six drillships stationed in the block, half of which are dedicated to development drilling and the other for exploration and appraisal works. Exxon and partners also have a proposal before the Environmental Protection Agency (EPA) for a 35-well campaign on the block. It could start as early as the third quarter of 2023.

China’s CNOOC is the other partner at the Stabroek Block with a 25% stake.

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