Hess says 'more to come' in Guyana after current project lineup

With three producing projects in Guyana, another three in various stages of construction and two on the drawing board, there is still "more to come" on the long-term production front for the ExxonMobil-led Stabroek block consortium, the top executive of Stabroek partner Hess Corp. said Jan. 7.

Production on the block has already reached 660,000 b/d of oil – 100,000 b/d more than the three producing projects' combined sanctioned capacity – which was achieved through debottlenecking projects.

This demonstrates that Stabroek reservoirs "are some of the best in the world," Hess Corp. CEO John Hess said in webcast remarks during a fireside chat at the Goldman Sachs Energy, CleanTech and Utilities Conference in Miami. They are "very prolific, high permeability, high porosity and [have] a lot more oil in place than we had estimated," Hess said.

Since the first three projects, whose sanctioned combined capacities totaled 560,000 b/d, are currently producing far above their nameplates, Hess predicted subsequent fields should be able to outperform also.

"We have every reason to believe that with the prolific reservoirs we have and the operating efficiency and productivity we have in our Guyana asset, that the next three [Floating, Production, Storage and Offloading] ships and probably the next five ships will produce in excess" also, he said.

Eyes resource beyond 11 billion boe

In addition, ExxonMobil currently has estimated Stabroek contains recoverable resources of 11 billion barrels of oil equivalent in place, although Hess said his own company's internal resource number is "higher," although he did not immediately state a figure.

Producing projects Liza Phase 1, Liza Phase 2 and Payara, plus the three projects which are still in progress – Yellowtail, set to come onstream later this year, Uaru (first oil slated for 2026) and Whiptail (first oil 2027) – will develop about 5 billion of the 11 billion boe estimate.

Those six projects, according to ExxonMobil, should produce 1.3 million b/d of oil collectively by 2027, but Hess thinks the actual number may ultimately be several hundred thousand barrels a day of output higher.

"I think the Exxon number [1.3 million b/d] is conservative," he said. "There are also a lot of tiebacks there that we haven't even cracked and we're doing appraisal on. So, the nameplate or sanctioned capacity of 1.3 million [b/d] ... l'll say it may be 1.7 million" b/d.

Beyond that, two future announced but unsanctioned projects, Hammerhead and Longtail, tentatively have current capacities assigned of about 150,000 b/d and 240,000 b/d respectively and would come online around 2028 and 2029.

Hammerhead has a field development plan submitted to the Guyanese government which it should sanction by April 2025, Hess added. It's "one tank of oil, a little heavier, but still very good economics and will have very high returns." Longtail is a gas liquids project with lighter crude oil that should be sanctioned a year from now, he added.

More exploration, appraisal eyed

Beyond those eight projects in Guyana, "there are more to come after that," he said. "There are some deeper horizons, inboard horizons, and younger rock as well ... extra appraisal northwest of the Liza complex, and a gas development that one day will come forward as well."

"We still have a pipeline of opportunities to grow our production past the 1.7 million b/d mark," Hess added.

In addition, Hess feels 'very confident' about its upcoming arbitration hearing in May 2025 over its pending merger with Chevron, as it continues to prepare for potential closure of the $53 billion transaction in mid-to-late third quarter, Hess also said at the Goldman Sachs conference.

The transaction, which was supposed to have closed by mid-2024, hit a snag after ExxonMobil last year exercised what it claimed was its right of first refusal on Hess' 30% stake in the block.

Both Hess and Chevron have challenged ExxonMobil. Hess' Guyana stake is a crown jewel in its portfolio and a likely motivator for Chevron to announce in October 2023 that it would acquire the company.

'Getting prepared' for Chevron merger

"We think it's very clear that the words on paper in English law say that there's no right of first refusal [contractually] to be exercised," Hess said. "So, we're very confident that the merger will go through and we're getting prepared for that."

Both Chevron and Hess also have US Gulf of Mexico operations, each with several operated large production facilities – which could also provide value longer-term as oil and natural gas continue to supply crucial global energy needs while the energy transition ramps up.

"Shale has played a key role but it's maturing, and offshore deepwater resources can give the world the oil production it needs," Hess said. "So, the Gulf of Mexico is a core area for us and for our merger partner Chevron."

Hess' brought online its latest US Gulf field, Pickerel, in July. Pickerel was a tieback to Hess' Tubular Bells platform in the Mississippi Canyon region of the east-central US Gulf and yields "very attractive returns, because the investment in infrastructure had already been made," Hess said.

"We're focused on tiebacks as one part of our [offshore] strategy," Hess said. Tiebacks, or hookups of oil and gas fields to existing nearby output hubs, have been numerous in the last decade as offshore producers sought inexpensive alternatives to long-lead construction of production facilities during a period of volatile oil prices.

Hess said his company is planning another tieback in 2025 when it attaches its Black Pearl development well to its Stampede production hub.

He also said the company is currently drilling the Vancouver prospect located in the Green Canyon area of the central US Gulf.