As most of the oil industry cuts back on spending, Hess Corp. said Tuesday it will allocate more money this year to its growth in the tiny South American country Guyana.
Source: Houston Chronicle
After the Exxon Mobil-led partnership with Hess in Guyana began producing oil in December, Exxon and Hess plan to dedicate more dollars to ramping up oil output and expediting future phases of the offshore development.
On Monday, Exxon and Hess said they were increasing their estimated recoverable reserves in Guyana to well more than 8 billion barrels from 6 billion barrels of oil equivalent.
New York-based Hess said it will spend $3 billion in capital and exploration in 2020, including more than $1.3 billion just on Guyana. Last year, Hess originally budgeted $2.9 billion for capital projects and finished the year at about $2.7 billion.
Hess also plans to spend more than $1.3 billion in North Dakota’s Bakken shale, meaning that the Bakken and Guyana account for more than 80 percent of Hess’ total capital budget. The planned Bakken spending, however, is a decrease from last year while the Guyana budget is up about 30 percent.
Largely because of the potential in Guyana, Hess was a top stock performer in the energy sector last year.
“We continue to successfully execute our long term strategy, with the majority of our capital budget directed to Guyana and the Bakken — two of the highest return investment opportunities in our industry that will become significant, long-term cash generators for our company,” CEO John Hess said.
The first phase in Guyana is ramping up to produce 120,000 barrels of oil equivalent a day this spring.
With Exxon Mobil’s planned Liza Unity vessel, the $6 billion second Liza phase is expected to come online in mid-2022. That larger project is expected to churn out 220,000 barrels of oil equivalent per day. A third phase, called Payara, is slated for 2023 with the same 220,000 barrels per day production estimate.
