Guyana has been producing oil since 2019 and as of this year has produced more than 375,000 barrels of oil per day. But according to Hess Corporation Chief Executive Officer (CEO) John Hess, there still remains multi-billion barrels of oil exploration potential in Guyana’s waters – evidently a factor in the intense interest Guyana has received for the oil blocks’ auction.
During a recent JP Morgan 2023 Energy, Power & Renewables Conference, Hess spoke about the two floating production, storage and offloading (FPSO) vessels – the Liza Destinyand Liza Unity, currently producing oil in the Liza 1 and 2 developments, Stabroek Block, where Hess’ partner ExxonMobil Guyana is the operator. He also spoke about the other three developments coming on stream.
“We’ve already sanctioned five low-cost developments. These are world class developments. The first two are on production, producing in excess of 375,000 (gross) barrels of oil per day. Recently closer to 400,000 barrels of oil per day. The performance of the reservoir and the two FPSOs is excellent.”
“We have three more developments in queue. Payara, that should come on in the fourth quarter. That’s 220,000 barrels per day. And then in 2025 and 2026, you have Yellowtail and Uaru should come on,” the executive said.
According to Hess, the company is doing a lot of reservoir evaluation prior to them investing billions of dollars to get another production ship. He explained that in the second half of 2023, they will be drilling two more prospects, Basher and Lanternfish, near their Fangtooth well, which could be tied into a potential development or their seventh ship.
“All of this is to appraise the area for the future development of the deep horizon. We want to make sure the reservoir is going to have the right performance. We’re doing drill stem tests, extended well tests, to really figure out the aerial extent, the producibility of the reservoir. We’re optimistic about the results so far. But it’s a work in progress.”
“As we get these well results and we calibrate the seismic, we’re starting to see other deep potential on the block. So, there’s exploration potential prospectively that we’re going to be able to build upon, because of the success we’re having at Fangtooth.”
Hess went on to explain that on the financial side, they are getting better financial returns in Guyana than the industry average. He was optimistic that by 2027, daily production could reach 1.2 million barrels.
“I think it’s important for everybody to know, these are world class economic, world class financial returns, where the breakeven is at Brent price between US$25 and US$35, to make a ten per cent return. So, it’s really the best investment return in the industry. And there’s more to come,” the CEO said.
“We have a line of sight to six of these developments, to produce over 1.2 million barrels of oil per day in 2027. And the potential to have 10 FPSOs to develop that discovered resource. In addition to that, we still have multi-billion barrels of exploration potential remaining. I think it’s also important to know that the Government there is very supportive of investment, very supportive of business,” Hess added.
In January of this year, the United States-based Hess Corporation had announced an oil discovery at the Fangtooth Southeast-1 (Fangtooth SE-1) well located approximately eight miles southeast of the original Fangtooth-1 discovery. The new discovery also came on the heels of the January 2022 oil find at the Fangtooth-1 well.
The third development in the Stabroek Block – Payara – is on track to come online by the end of 2023 with a gross production capacity of approximately 220,000 bopd; while the Yellowtail – the fourth development – is slated for 2025 with a production capacity of some 250,000 bopd. Both these development projects have been approved by the Guyana Government.
Uaru is the fifth development and is expected to come online at the end of 2026 with a gross production capacity of approximately 250,000 bopd with first oil anticipated at the end of 2026. The development plan for Uaru was submitted for Government approval in November 2022 and approval was granted back in April 2023.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027. However, the co-venture partners had also said that the results of the appraisal on the Fangtooth well could see the number of planned FPSOs increased to seven.
