The oil industry has been hard hit by two unprecedented risk factors—the COVID-19 pandemic and the war in Ukraine. To survive these turbulent times and any other similar risks well into 2040, Hess Corporation believes the key is continued exploration and development in Guyana, Suriname, and the Gulf of Mexico.
President and Chief Executive Officer of the American conglomerate, John Hess said his company’s objective is to grow its resource, stay down the cost curve, and generate industry-leading cash flow. The best way to achieve this is through exploration he said, in the three mentioned territories.
“The offshore oil sector has great potential and we have focused our exploration efforts really on the western side of the Atlantic margin. So, that is Guyana, Suriname, the Gulf of Mexico and we potentially have a well next year in Finland with BP and Chevron,” said the Hess CEO.
He noted that the company is looking to increase the resource base it has, and he believes with those countries, it is well-positioned to do so for 2030 to 2040.
Hess said, “Oil and gas is going to be needed for the next 30+ years… The key challenge is that the global energy investment for oil and gas is about US$500 billion a year. Exploration within this value chain has gone from US$60 billion a year to US$20 billion partly because of COVID and partly because so much money was going to shale. The key to being successful in the oil sector is being able to grow your resource, and so, we want to be able to have sustainable growth until 2040 and the key is low cost and low carbon barrels.”
The Stabroek Block partner said Suriname fits into that portfolio, though the success has not been to the same extent as Guyana’s, which has over 30 discoveries and almost 11 billion barrels with the potential for more multi-billion barrels to be unlocked.
“So, we have plenty to say grace for and be thankful in Guyana, but we want to have some other irons in the fire; Suriname is one, another is the Gulf of Mexico, where we have an enviable acreage and then a unique opportunity in Canada,” the Hess CEO stated.
In 2016, Hess acquired a one-third non-operated interest in the Block 42 contract area, which is located offshore Suriname along the northeast margin of South America. Deepwater Block 59, which is to the north and contiguous to Block 42, was awarded to Hess and co-venture partners ExxonMobil and Equinor in 2017.
Furthermore, Hess has been active in the deepwater Gulf of Mexico for more than 25 years following the discovery of oil at the Baldpate field in 1991. Today, the company is one of the largest gross-operated producers in the Gulf of Mexico, with an extensive inventory of high return infrastructure opportunities.