Released August 01, 2024 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Production from the Stabroek Block off the coast of Guyana could be close to 1 million barrels per day by the end of the decade, Hess Corporation (NYSE:HES) (New York, New York) announced Wednesday.
Hess has a 30% stake in the Stabroek Block alongside Exxon Mobil Corporation (NYSE:XOM) (Spring, Texas). Hess in its second quarter earnings report put net production at Stabroek at 192,000 barrels of oil per day (BBL/d), compared with 110,000 BBL/d during the same period last year.
The ExxonMobil-led consortium has made more than 30 discoveries in the Stabroek Block since 2015. With production expanding by 98,000 BBL/d between 2020 and 2023, Guyana is the third-fastest growing producer not to be a member of the Organization of the Petroleum Exporting Countries (OPEC).
Hess put a third development, dubbed Payara, in production in November, and it expects to reach an initial production capacity of about 220,000 BBL/d later this year. Net production during the third quarter, however, should decline from 192,000 BBL/d to about 172,000 BBL/d while it adds pipelines and related infrastructure to floating production, storage and offloading (FPSO) vessels above the Liza Basin off Guyana.
But that should only be a temporary downturn. Sanctioned in 2022, Hess is expecting 250,000 BBL/d from the Yellowtail prospect once production begins next year. By 2026, the Uara development will be in production, with another 250,000 BBL/d expected. Two more developments, Hammerhead and Whiptail, are expected to reach first production by the end of the decade, combining for a range of between 370,000 BBL/d and 430,000 BBL/d.
That means Guyana could be in the 1 million-barrel-per-day club by the end of the decade, assuming all project timelines hold. The increase in oil production, meanwhile, has driven Guyana to develop its industry further, with the country considering the construction of a downstream unit to process some of the crude it produces.
Guyana's ascent, meanwhile, is clouded by geopolitical issues emanating from neighboring Venezuela. A long-simmering dispute over territorial control escalated further when Venezuela declared the Essequibo region in Guyana as a state of its own this year.
The borders of Essequibo include the Stabroek block. Post-election tensions in Venezuela could in theory exacerbate some of the territorial issues in the region. The opposition in Venezuela claims to have evidence that its candidate, Edmundo Gonzalez, secured enough votes to unseat incumbent President Nicolas Maduro, who has so far not released detailed polling results that would confirm his own claim to victory.
Elsewhere, Hess reported net production of 494,000 barrels of oil equivalent per day during the second quarter, a 27% increase from year-ago levels. Apart from Guyana, the company said production was stimulated by output from the Bakken shale basin in North Dakota.
The company turned in net income of $757 million, compared with $119 million during the same period last year.
Chevron-Hess Deal Arbitration Drags On Until Summer 2025
Hess Corporation is an acquisition target of Chevron Corporation (NYSE:CVX) (San Ramon, California).
However, Chevron reported Wednesday that a crucial arbitration hearing regarding the contentious acquisition of Hess subsidiary Hess Guyana Exploration Limited has been set for May 2025, with a decision expected in the following three months.
"Chevron and Hess had expected and requested that this hearing be held earlier, but the arbitrators' common schedules did not make this possible," Chevron said in a filing with the U.S. Securities and Exchange Commission (SEC).
The acquisition is subject to arbitration after ExxonMobil maintained it has right of first refusal over Hess' oil project stake off Guyana.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Hess has a 30% stake in the Stabroek Block alongside Exxon Mobil Corporation (NYSE:XOM) (Spring, Texas). Hess in its second quarter earnings report put net production at Stabroek at 192,000 barrels of oil per day (BBL/d), compared with 110,000 BBL/d during the same period last year.
The ExxonMobil-led consortium has made more than 30 discoveries in the Stabroek Block since 2015. With production expanding by 98,000 BBL/d between 2020 and 2023, Guyana is the third-fastest growing producer not to be a member of the Organization of the Petroleum Exporting Countries (OPEC).
Hess put a third development, dubbed Payara, in production in November, and it expects to reach an initial production capacity of about 220,000 BBL/d later this year. Net production during the third quarter, however, should decline from 192,000 BBL/d to about 172,000 BBL/d while it adds pipelines and related infrastructure to floating production, storage and offloading (FPSO) vessels above the Liza Basin off Guyana.
But that should only be a temporary downturn. Sanctioned in 2022, Hess is expecting 250,000 BBL/d from the Yellowtail prospect once production begins next year. By 2026, the Uara development will be in production, with another 250,000 BBL/d expected. Two more developments, Hammerhead and Whiptail, are expected to reach first production by the end of the decade, combining for a range of between 370,000 BBL/d and 430,000 BBL/d.
That means Guyana could be in the 1 million-barrel-per-day club by the end of the decade, assuming all project timelines hold. The increase in oil production, meanwhile, has driven Guyana to develop its industry further, with the country considering the construction of a downstream unit to process some of the crude it produces.
Guyana's ascent, meanwhile, is clouded by geopolitical issues emanating from neighboring Venezuela. A long-simmering dispute over territorial control escalated further when Venezuela declared the Essequibo region in Guyana as a state of its own this year.
The borders of Essequibo include the Stabroek block. Post-election tensions in Venezuela could in theory exacerbate some of the territorial issues in the region. The opposition in Venezuela claims to have evidence that its candidate, Edmundo Gonzalez, secured enough votes to unseat incumbent President Nicolas Maduro, who has so far not released detailed polling results that would confirm his own claim to victory.
Elsewhere, Hess reported net production of 494,000 barrels of oil equivalent per day during the second quarter, a 27% increase from year-ago levels. Apart from Guyana, the company said production was stimulated by output from the Bakken shale basin in North Dakota.
The company turned in net income of $757 million, compared with $119 million during the same period last year.
Chevron-Hess Deal Arbitration Drags On Until Summer 2025
Hess Corporation is an acquisition target of Chevron Corporation (NYSE:CVX) (San Ramon, California).
However, Chevron reported Wednesday that a crucial arbitration hearing regarding the contentious acquisition of Hess subsidiary Hess Guyana Exploration Limited has been set for May 2025, with a decision expected in the following three months.
"Chevron and Hess had expected and requested that this hearing be held earlier, but the arbitrators' common schedules did not make this possible," Chevron said in a filing with the U.S. Securities and Exchange Commission (SEC).
The acquisition is subject to arbitration after ExxonMobil maintained it has right of first refusal over Hess' oil project stake off Guyana.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
