Three sanctioned developments in Guyana have  breakeven oil price of between US$25 and US$35 per barrel

The Hess Exploration company is spending big on its Guyana operations, allocating as much as more than 80 per cent of its capital and exploratory budget for 2021 to its offshore blocks in the South American Caribbean country.

With a 30 per cent equity interest in the Stabroek Block, Hess Exploration has allotted more than 80 per cent of its US$1.9 billion capital and exploratory budget to its Guyanese offshore blocks. Of the US$1.9 billion budgetary allocation for this year, US$670 million or 35 per cent will go towards production, while US$780 million or 41 per cent will finance offshore Guyana developments.

The remaining US$450 million or 24 per cent will fund exploration and appraisal activities. Hess Exploration Chief Executive Officer John Hess admitted that the majority of the company’s 2021 budget is allocated to Guyana.

Guyana is the location of Hess’ three sanctioned oil developments, which have a Brent breakeven oil price of between US$25 and US$ 35 per barrel.

Capital injection

Hess Exploration will inject US$235 million towards the Payara development which it stated has a capacity to produce up to 220,000 gross barrels of oil per day, with the first production expected in 2024. For his part Chief Operating Officer, Greg Hill pointed out that the focus in 2021 in Guyana will be on advancing Hess Exploration’s next two sanctioned developments to first oil.

These two developments are the Liza Phase 2 slated for early 2022 and Payara in 2024. This will be preceded by front end engineering and design work for future development phases on the Stabroek Block.

 “We also will continue to invest in an active exploration and appraisal programme, with 12-15 wells planned on the Stabroek Block,” Hill reported. Funds are also included in the budget for well planning on block 42 in Suriname (Hess 33.3 per cent), seismic acquisition and processing in Guyana, and the deep-water Gulf of Mexico and for licence acquisitions.