In its latest Upstream Report released this month, Rystad Energy said when comparing capex guidance for 2022 with actual spending in 2021, US oil major ExxonMobil is among those companies set to face the largest year-on-year growth. Hess Corporation, Exxon’s partner on the prolific Stabroek Block offshore Guyana, will plug huge sums into its operations in the South American country and the Bakken shale play in the US.
“For ExxonMobil, the core US shale patch of the Permian Basin is one of the core areas for investment growth,” Rystad Energy said. “The pace of the development in this area remains flexible, due to the short-cycle nature of shale assets – it can be rapidly ramped up or down depending on market conditions.”
ExxonMobil estimates that average capex over the next six years will be about 50% above 2021, which is still significantly below the levels of 2019.
In February, the company started production at its second major development offshore Guyana. The successful start-up of the Liza Phase 2 development brought total production capacity to more than 340,000 barrels per day. In early April, ExxonMobil announced it made a final investment decision for the Yellowtail development. Yellowtail will be the company’s fourth and largest development to date in Guyana with production capacity of 250,000 barrels of oil per day. It is expected to begin production in 2025. Additionally, Payara FPSO construction is running approximately five months ahead of schedule with start-up likely before year-end 2023.
According to Rystad Energy, in relative terms, US independents Occidental Petroleum and Hess have guided the largest increase in capital expenditure of 41% and 44%, respectively.
“For 2022, Hess has set an E&P budget of $2.6 billion, of which approximately 80% will be allocated to Guyana and the Bakken shale play in the US,” Rystad Energy pointed out.
The company expects to lift some 23 million barrels of oil in the remaining quarters of the year from the Stabroek Liza operations, representing an increase in its initial output for 2022.