Wednesday, July 6, 2022

Hess commits US$2.3 billion to Yellowtail development

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Days after government and regulatory approvals were granted for the massive Yellowtail project, Hess Corporation announced its final investment decision on the project with a commitment of US$2.3 billion.

This represents the company’s net share of development costs, excluding pre-sanction costs and the purchase cost for the ‘One Guyana’ floating production, storage and offloading (FPSO) vessel.

Of this, US$210 million is expected in 2022, US$430 million in 2023, US$585 million in 2024, US$390 million in 2025 and US$295 million in 2026, Hess projects.

“We are excited to sanction our fourth oil development and the largest FPSO to date on the Stabroek Block,” said chief executive officer, John Hess. “We look forward to continuing to work with the Government of Guyana and our partners to realize the remarkable potential of this world class resource for the benefit of all stakeholders. The world will need these low cost oil resources to meet future energy demand and help ensure an affordable, just and secure energy transition.”

Liam Mallon, president of ExxonMobil Upstream Company, made similar remarks in announcing ExxonMobil’s final investment decision on Monday morning.

Yellowtail, the fourth oil development and the largest on the Stabroek Block, is expected to produce approximately 250,000 barrels of oil per day starting in 2025.

According to Hess, the resource base being targeted is approximately 925 million barrels of oil. Six drill centers are planned with up to 26 production wells and 25 injection wells.

Hess reiterated a commitment of the Stabroek block co-venturers to placing seven FPSOs offshore Guyana by 2027. The consortium sees potential for 10 projects altogether to develop the Block’s 10 billion oil-equivalent barrels.

Hess Corporation’s Guyana affiliate, Hess Guyana Exploration Limited holds a 30% stake in the Stabroek block, while ExxonMobil affiliate, Exploration and Production Guyana Limited (EEPGL) is the operator with a 45% stake, and CNOOC Limited’s affiliate, CNOOC Petroleum Guyana Limited, holds the remaining 25%.

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