Appraisal work to dominate Hess, Guyana partners' activity in Stabroek development

Houston — With first production now on stream from deepwater Guyana, Hess Corp. is working on the development of multiple production phases that will likely outnumber the five already targeted in the next five years, company officials said Wednesday.

In the coming months, Hess (30% stake) and partners ExxonMobil (45%) and China's CNOOC (25%) will appraise several existing discoveries inside the Stabroek block and size production vessels needed for future developments, Hess COO Greg Hill said during the company's fourth-quarter 2019 earnings call.

The companies, which have made 16 discoveries on Stabroek since May 2015, have said they envision 750,000 b/d from its five developments by 2025.

Hill said the first half of 2020 will be "dominated by appraisal activities," particularly around the Turbot discovery area in the southeast, which includes the Yellowtail and Longtail discoveries made in the last 18 months, and potentially others.

One of the company's existing four drillships in Guyana, the Noble Bob Douglas, will continue drilling appraisal wells this year, and a fifth drillship should arrive later in the year, Hill said.

In second-half 2020, the consortium plans to drill "several" exploration wells, including some that will test emerging deeper Stabroek plays, Hill added.

EYES 25,000 b/d THIS YEAR

Liza Phase 1, Guyana's first deepwater source of production and the original Stabroek discovery, came on stream December 20. Hess' first allotted 1 million-barrel oil cargo is scheduled to be sold in March 2020.

Hess reported 1,000 b/d of production from its share of Guyana output in Q4 2019. Liza is now producing 75,000 b/d from three of the five wells available at startup into the Liza Destiny floating production, storage and offloading vessel, Hill said. Production should reach the FPSO's capacity of 120,000 b/d in the coming months.

Hess' net production in Guyana should total 25,000 b/d for full-year 2020, he said. The roughly 9 million barrels of output expected would call for nine tanker lifts this year, although Hess officials declined to be more specific on the cadence of future lifts in 2020.

Work will continue in Stabroek with Liza Phase 2, currently under development and slated for mid-2022 startup, and the third development Payara is not yet sanctioned but could come online as early as 2023. But Hess and its partners have not yet determined which of the 16 discoveries to develop next.

Hill noted the areas in southeast Stabroek, including Turbot, Yellowtail, Longtail and Pluma, along with the Hammerhead discovery in the southeast "will underpin future FPSOs."

He said all appraisal activities in the eastern seaboard between the Turbot and Liza discoveries will go toward "really trying to understand how many vessels will it take to evacuate all that oil, which is substantial."

Hammerhead, an earlier discovery, has now been passed to the development team, Hill said. Hammerhead is "notionally" envisioned for an FPSO of about 140,000 b/d, he said.

A fifth FPSO, which will produce a discovery not yet named, is eyed as a "large one," of 220,000 b/d; the same size as Liza Phase 2 and Payara, Hill said.

Hill noted the "heavy lift for this year" will be determine vessel sizing, numbers and cadence in the ramp up of future Guyana production.