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Thursday, November 26, 2020

Hess confirms potential for 10 FPSOs at Guyana’s Stabroek Block

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Hess Corporation said on Wednesday the development of hydrocarbon resources offshore Guyana now has the potential for up to 10 floating production storage and offloading (FPSOs) units particularly as the estimated gross discovered recoverable resources have increased to approximately 9 billion barrels of oil equivalent.

This confirms an earlier projection by analysts at Norway-based Rystad Energy who said one new FPSO is expected to be added each year for the next ten years at the prolific Stabroek block where Hess has a 30% stake and ExxonMobil is operator. China’s CNOOC is the third co-venturer on the block with 25% interest.

Speaking on the company’s Q3 earnings call, CEO John Hess reminded that on September 8 the Stabroek block co-venturers announced the Redtail and Yellowtail-2 discoveries, bringing the total discoveries on the block to 18.

“Incorporating the current assessment of additional volumes from the Redtail, Yellowtail-2 and Urau discoveries, we are increasing the estimate of gross discovered recoverable resources for the Stabroek block to approximately nine billion barrels of oil equivalent,” Hess said. “We also now see the potential for up to 10 FPSOs to develop the current discovered recoverable resource base.”

Redtail-1 encountered approximately 232 feet (70 meters) of high-quality oil-bearing sandstone and was drilled in 6,164 feet (1,878 meters) of water. Drilling at Yellowtail-2 had encountered 69 feet (21 meters) of net pay in newly identified, high-quality oil-bearing reservoirs among the original Yellowtail-1 discovery intervals.

“We still have to do a lot of engineering work on those 10 FPSOs but I think this regular cadence of one a year, you can assume, and obviously as you get further out in time, some of those earlier FPSOs could be in decline,” said Greg Hill, Chief Operations Officer at Hess Corporation, also speaking on the earnings call. He added that there are still multi-billion barrels of upside that haven’t been explored or appraised yet on the block.

Schreiner Parker, Rystad Energy’s Vice President for Latin America and the Caribbean, told OilNOW in August that Guyana is expected to benefit from approximately US$50 billion in project sanctioning spread across 10 FPSOs this decade.

“We believe that ExxonMobil and its partners could commit at least one new FPSO unit each year for the next ten years to Guyana. So, we also estimate that more than 1.2 million barrels a day of production could be sanctioned by 2025,” Parker said. Rystad Energy expects Guyana’s production to hit peak in the mid-2030s at around 1.4 million barrels of oil per day (b/d).

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