Tuesday, December 7, 2021

Hess closing Guyana investments for 2021 at US$750 million; US$1 billion budgeted for 2022

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OilNOW
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Hess Corporation, one of the co-venturers on the prolific Stabroek block, announced last week that it will close 2021 spending on its Guyana development at US$750M. Going into 2022, Hess’ Executive Vice President and Chief Financial Officer John Rielly said that approximately US$1 billion will be budgeted for its Guyana investments.

“We went into the year with the guide of US$780 million for our development spend in Guyana. We’re going to come in under that, and so, let me just say we’re proud to be approximately US$750 million on our Guyana development spend this year. With Liza Phase Two and the continued development on Payara, and …Yellowtail, we think it’s approximately US$1 billion will be the Guyana capital for the developments next year…,” the Chief Financial Officer explained during the oil company’s earnings call last Wednesday.

Hess says Yellowtail is one of the world’s best projects

As it relates to the oil sales, Hess sold three one-million-barrel cargoes of oil in the third quarter in Guyana, up from two one-million-barrel cargoes of oil sold in the second quarter. Also, for the third quarter, Reilly indicated that exploration and production (E&P) sales volumes were under lifted compared with production by approximately 175,000 barrels, which he noted had an insignificant impact on Hess’ after-tax results for the quarter.

“During the fourth quarter, we expect to sell two one-million-barrel cargoes of oil from Guyana. Our E&P capital and exploratory expenditures are expected to be approximately US$650 million in the fourth quarter. Full-year guidance remains unchanged at approximately US$1.9 billion,” the finance chief related.

Last week OilNOW reported that Hess maintained its financial strength and managed to rake in US$155 million in income in the third quarter. On an adjusted basis, the corporation reported net income of US$86 million in the third quarter of 2021, compared with an adjusted loss of US$216 million in the prior year’s quarter.

Stabroek Block developments such as Liza Phase 2 and Payara are on track for startup in 2022 and 2024 respectively, Hess’ Chief Executive Officer, John Hess assured at the earnings call.

As for the fourth development plan for Yellowtail, Hess said the project document was recently submitted to the Government of Guyana for approval. Pending this, the project is envisioned to have a gross capacity of approximately 250,000 barrels of oil per day with first oil in 2025.

The CEO said the company remains focused on executing its strategy and achieving strong operational performance.

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