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Liza Phase 1 cost expected to be around US$1 billion below budget

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Development cost for the 120,000 barrels per day Liza Phase 1 project offshore Guyana has been reduced by close to US$1 billion according to an official of Hess Corporation, a 30 percent co-venturer at the 6.6 million acres Stabroek Block. ExxonMobil is operator with 45% interest and CNOOC has 25% interest.

At the time of sanctioning in June 2017, the budgeted cost was just over US$4.4 billion which included a lease capitalization cost of approximately $1.2 billion for the Liza Destiny FPSO, built by Dutch floater specialist SBM Offshore.

“We now expect the gross cost of the development to be approximately $3.5 billion. Or 21 percent below the sanctioned estimates,” Greg Hill- President and Chief Operating Officer at Hess told investors on Wednesday on the company’s Q4 earnings call.

The Liza Phase 1 Development is located approximately 120 miles offshore Guyana in water depths of 1,500 to 1,900 meters. The project, which began producing oil in December, includes four drill centers with a total of 17 wells, including eight production wells, six water injection wells and three gas injection wells.

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