Hess allocates 41 pct of budget to Guyana projects

U.S. oil and gas company Hess Corporation has allocated the majority of its E&P budget for 2021 to Guyana developments and the Bakken with Guyana getting 41 per cent.

Hess said on Monday that more than 80 per cent of its 2021 Exploration & Production capital and exploratory budget of $1.9 billion will be allocated to Guyana and the Bakken.

Net production is forecast to average approximately 310,000 barrels of oil equivalent per day in 2021, excluding Libya.

Hess CEO, John Hess, said: “The majority of our 2021 budget is allocated to Guyana, where our three sanctioned oil developments have a Brent breakeven oil price of between $25 and $35 per barrel, and to the Bakken, where we have a large inventory of future drilling locations that generate attractive financial returns at current prices”.

Chief Operating Officer, Greg Hill, said: “Offshore Guyana, our focus in 2021 will be on advancing our next two sanctioned developments to first oil – Liza Phase 2 in early 2022 and Payara in 2024 – and on 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 program, with 12-15 wells planned on the Stabroek Block”.

The $1.9 billion budget is allocated: $670 million (35%) for production, $780 million (41%) for offshore Guyana developments, and $450 million (24%) for exploration and appraisal activities.

When it comes to developments, $25 million is associated with the Liza Phase 1 development on the Stabroek Block in Guyana (where Hess has a 30 per cent interest), where production reached nameplate capacity of 120,000 gross barrels of oil per day in December 2020.

Furthermore, $450 million are allocated for the Liza Phase 2 development with a capacity of up to 220,000 gross barrels of oil per day, with the first production expected in early 2022.

Also, $235 million are for the Payara development with a capacity of up to 220,000 gross barrels of oil per day, with the first production expected in 2024 and $70 million are primarily for front end engineering and design work for future development phases on the Stabroek Block.