Hess plugs over three-quarter billion dollars more into Guyana offshore operations

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Hess Corporation on Monday announced its 2021 Exploration & Production capital and exploratory budget of $1.9 billion with more than 41% allocated to offshore developments in Guyana where the company has a 30% stake in the prolific Stabroek block.

CEO John Hess reminded that the three oil developments sanctioned so far in Guyana ā€“ Liza Phase 1, 2 and Payara, have a Brent breakeven oil price of between $25 and $35 per barrel which remains integral to companyā€™s growth plans.

ā€œBy investing only in high return, low-cost opportunities, we have built a differentiated portfolio of assets that we believe will provide industry leading cash flow growth over the course of the decade,ā€ Hess disclosed during the presentation of the companyā€™s 2021 budget.

Hess ensuring cash keeps flowing to fund capital-intensive projects in Guyana

The relatively low cost of producing crude in Guyana continues to make the South American country a favourable investment destination even with the impact of demand destruction brought on by the coronavirus.

Hessā€™s Chief Operating Officer, Greg Hill emphasized Guyanaā€™s importance to the company this year.Ā  ā€œOffshore Guyana, our focus in 2021 will be on advancing our next two sanctioned developments to first oil ā€“ Liza Phase 2 in early 2022 and Payara in 2024 ā€“ and on front end engineering and design work for future development phases on the Stabroek Block.

Development of the nationā€™s offshore oil fields will also feature prominently in Hessā€˜s long-term project development plans. ā€œWe also will continue to invest in an active exploration and appraisal program, with 12-15 wells planned on the Stabroek block,ā€ Hill disclosed.

Exxon targeting over a dozen wells, ramping up drill capacity offshore Guyana this year ā€“ Routledge

The $1.9 billion budget Hess has allocated for 2021 comprises $670 million (35%) for production, $780 million (41%) for offshore Guyana developments and $450 million (24%) for exploration and appraisal activities.

Specifically, $25 million of the Hess budget is associated with the Liza Phase 1 development on the Stabroek Block in Guyana (Hess 30%), where production reached nameplate capacity of 120,000 gross barrels of oil per day in December 2020.

Additionally, $450 million is for the Liza Phase 2 development with production startup expected in early 2022 with a capacity of up to 220,000 gross barrels of oil per day, while $235 million is for the Payara development with startup planned for 2024 at a capacity of up to 220,000 gross barrels of oil per day.

Hess sees more upside to Guyanaā€™s 9 billion boe estimate, big potential in Santonian

And, as Hess prepares for the long term, the company has allocated $70 million primarily for front end engineering and design work for future development phases on the prolific Stabroek block offshore Guyana.

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