A recent report by Wood Mackenzie has yet again reinforced Hess Corporation’s longstanding position that it sits on the ‘holy grail’ of the industry’s best oil provinces. During its company’s first-quarter earnings call for 2022, Chief Executive Officer (CEO), John Hess made reference to the report where in one case, he reminded that the WoodMac document highlights Guyana as one of the highest-margin, lowest carbon intensity oil developments globally.
Hess said the world will need these low-cost oil resources for decades to come to meet future energy demand while noting that his company is in an advantaged position to return significant value to shareholders.
The CEO also noted that the WoodMac study states that “the production growth ramp for the Stabroek Block is the best in the industry compared with other major deepwater developments, which will benefit the people of Guyana and our shareholders.”
Along with the foregoing, Hess spoke about a number of important milestones which were recently achieved in Guyana’s oil rich Stabroek Block.
He noted that current production at the Liza Phase 1 development is 130,000 barrels of oil per day, ahead of its original gross nameplate capacity. Following production optimisation work on the Liza Destiny FPSO, Hess said it is expected to increase to more than 140,000 barrels of oil per day over the course of this quarter.
As for the Liza Phase 2 development, which achieved first oil in February, he said it is ramping up ahead of schedule and is expected to reach its gross production capacity of approximately 220,000 barrels of oil per day by the third quarter.
With respect to the third development on the Stabroek Block at the Payara field with a gross capacity of approximately 220,000 barrels of oil per day, he said it is also ahead of schedule and is now expected to start up in late 2023.
As for the Yellowtail Project, Hess told shareholders that it has received early April sanction from government and is poised for start-up in 2025.
The CEO said, “The Yellowtail development has world-class economics and will be the largest to date on the Stabroek Block. The project will develop an estimated resource base of approximately 925 million barrels of oil and have a gross production capacity of approximately 250,000 barrels of oil per day.”
Hess said the company continues to see the potential for at least 6 floating production, storage and offloading vessels (FPSOs) on the block in 2027 with a production capacity of more than 1 million gross barrels of oil per day and up to 10 FPSOs to develop the discovered resources on the block.