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Hess signage displayed on a gas station in the United States. (Photo: Business Insider)

Hess Corp still bullish on Guyana

Hess signage displayed on a gas station in the United States. (Photo: Business Insider)

Despite taking a hit from slumping oil prices, Hess Corporation still maintains confidence that its operation in Guyana can keep it afloat.

“Our company’s long term strategy has enabled us to build a high-quality and diversified portfolio that is resilient in a low price environment,” CEO John Hess said in statements accompanying second-quarter results.

CEO of Hess Corporation John Hess (File photo)

“With multiple phases of low-cost oil developments in Guyana, we are well positioned to deliver industry-leading cash flow growth and increasing financial returns in the years ahead.”

Hess noted that the price point for oil from the Liza project, offshore Guyana, for the months of April and May was lower than that realised in June. Notwithstanding, the energy company reported a combined 39 per cent increase in production at both the Liza field and Mississippi, United States-based Bakker production to offset the reduction in oil prices.

More projects, more rewards

“With multiple phases of low-cost oil developments in Guyana, we are well positioned to deliver industry-leading cash flow growth and increasing financial returns in the years ahead.”

John Hess, CEO, Hess Corporation

Still, the company is also buoyant about its natural gas prospects in the Liza field and outlined that, “The operator, Esso Exploration and Production Guyana Limited, is currently commissioning water injection equipment and bringing natural gas injection fully online that should enable the Liza Destiny floating production, storage and offloading vessel (FPSO) to reach its capacity of 120,000 gross BOPD (barrels of oil per day) in August.”

With the commissioning of the Liza Destiny FPSO, Hess expects a significant increase in production capacity to 220,000 BOPD by early 2022. However, the oil and gas company is still awaiting the approval of the Guyana Government to explore the Payara oil field, also offshore the South American country.

COVID-19 slowdown

Hess, though, underscored the impact of the coronavirus on its oil exploration and production activities in Guyana.

The Lisa Destiny floating production, storage and offloading vessel in Guyana’s offshore oil field. (File photo)

“As a result of COVID-19 related travel restrictions in Guyana, the operator temporarily idled two drillships but both drillships resumed drilling operations by the end of the second quarter. The Stena Carron rig recently completed appraisal drilling at Yellowtail-2, located one mile southeast of Yellowtail-1. The well identified two additional high-quality reservoirs, one adjacent to and the other below the Yellowtail Field, further demonstrating the world-class quality of this basin,” the statement outlined.

“This additional resource is currently being evaluated and will help form the basis for a potential future development. The Noble Don Taylor commenced drilling of the Redtail exploration well, which is 1.25 miles northwest of Yellowtail-1, in July. The other two drillships, the Noble Bob Douglas and the Noble Tom Madden, are drilling and completing Liza Phase 1 and Phase 2 development wells,” Hess explained further.