With the world facing a confluence of economic pressures stemming from the war between Russia and Ukraine, Hess Corporation has assured that resulting inflation is being monitored carefully. During its Q2 earnings call on Wednesday, Chief Financial Officer (CFO) at Hess Corporation, John Rielly said the company is keeping a watchful eye on inflation and what implications there may be for its 2023 budget.
Rielly said, “We are looking at that obviously but there’s no change to our base production programme in the Bakken. We’re going to have the four rigs there. We want to optimise our infrastructure up there, lower our cash cost, and it’s the best return way to develop the Bakken. So, there won’t be any change there.”
He said the company will continue to monitor the cost and update the market on its budget.
“So, on a go-forward basis, at Guyana, again, the plan there is unchanged. Obviously, it is just a phenomenal province for us for oil development, the returns there are excellent, and we will be trying to bring forward as much as we can to get this oil for the country as early as possible.”
With the foregoing in mind, he said, the Payara and Yellowtail Projects are progressing well as work continues on getting the fifth ship in for Final Investment Decision (FID) along with getting the development plan to the government.
Rielly was also in high praise of Exxon which he said has been doing an outstanding job thus far in managing the cost in the Guyana projects. He said however this is not to mean that Hess is not susceptible to cost inflation that everyone else is seeing.
“… But as I said, we have about US$1 billion this year in our plan in our original budget, and we’re not changing that in Guyana… So, I think you can take that again as our soft guidance on what we’re doing, and we’ll keep practicing our lean culture and trying to get in as much as possible working with our strategic plan,” the CFO concluded.
Hess has a 30% stake in the Stabroek Block, where two out of four approved projects are producing at combined capacity of 360,000 barrels of oil per day.
At least six offshore floaters are expected to be operational by 2027, producing more than a million barrels of oil per day.