Hess Sets Sights on Guyana Oil

Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Hess Corporation (NYSE:HES) (New York, New York) will invest $3.7 billion in exploration and production efforts this year, with 80% of the funds destined for developments offshore Guyana and in the U.S. Bakken formation, the upstream energy company said this week.

The company expects its oil production in Guyana to reach 100,000 barrels per day (BBL/d) this year. Hess has a 30% stake at the Stabroek block, Guyana's prolific oil block operated by Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas).

The Stabroek block, which has reserves of 11 billion barrels, has catapulted Guyana into the energy world, making it the newest oil state.

Hess said it will invest $90 million in the Liza phase 1 and 2 of the Stabroek block, which have a production capacity of 360,000 BBL/d, totaling all of Guyana's current oil output. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production project and plant databases can click here for a project report on the Liza Unity FPSO (floating production storage and offloading unit) 2023 Drilling Program and click here for the related plant profile.

Hess also will earmark $1.2 billion for the development of the Payara, Yellowtail, and Uaru oil fields, all offshore Guyana. The Payara project is expected to pump its first oil by the end of this year with an output capacity of 220,000 BBL/d. The Yellowtail field will start producing oil by 2025 with output of 250,000 BBL/d. The Uaru development will come online by the end of 2026, adding another 250,000 BBL/d to the Exxon-led consortium. Industrial Info is tracking five Hess projects that are tied to the development of the Uaru Meco oil field. Subscribers can click here for the project list.

Based on these numbers and expectations, the Stabroek block is expected to be producing nearly 1 million BBL/d by the end of this decade.

Hess also said it will aim another $250 million "primarily for front end engineering and design work for future development phases on the Stabroek Block." Additionally, part of the funding for drilling efforts will be destined for 10 new exploration and appraisal wells in the Stabroek block.

The oil production at Stabroek has skyrocketed Guyana's gross domestic product and has set the Guyanese government's eyes on further energy development. The government is studying the possibility of opening a small refinery with a capacity of 30,000 BBL/d to refine some of its output and supply the domestic market. Moreover, the government has launched a new round of auctions for offshore fields in hopes of finding more oil beneath the sea.

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