Hess eyeing approval for 6th production vessel in Stabroek block by 2023

…says pace of development in Guyana’s waters “industry leading”

Describing the pace at which development in Guyana’s waters is moving as “industry leading”, ExxonMobil’s partner in the Stabroek block, Hess Corporation, anticipates a sixth floating, production, storage and offloading (FPSO) vessel in the block would be approved by next year.
Hess Corporation’s Chief Executive Officer (CEO) John Hess made this disclosure during a recent interview on Bernstein’s 38th Annual Strategic Decisions Conference. According to him, they are also hoping to get their fifth FPSO sanctioned by this year end.
“You have to spend enough time doing both the exploration and appraisal work to define a 600-million-to-a-billion barrels of resource, to underpin a ship, depending on the size of the ship. Let’s say from 200,000 barrels of oil per day to 250,000 barrels of day production. And so, we’re cued up now, where we’re looking at what will the oil be for the fifth ship, which will hopefully get sanctioned by the end of this year. Then the sixth ship, by the end of next year,” Hess said.
In talking about the fast pace of development in Guyana’s waters, Hess also referred to Rex Tillerson, who served as CEO of ExxonMobil prior to being appointed US Secretary of State in 2016.
“When we were fortunate enough to get our first discovery in 2015, I remember talking to Rex Tillerson about this. He said, ‘John, we want to go as fast as we can, but we don’t want to have any leakage.’ What was he really saying? Let’s be capital efficient and operating expense efficient.”
According to Hess, sanctioning one ship a year is a huge task. In fact, he described Exxon’s approach of one ship a year as “industry leading”. According to Hess, their development of oil production is two to three times faster than any other global offshore development.
Currently, operator in the Stabroek block, ExxonMobil, has four projects developing the recoverable resource offshore Guyana. The Liza Phase 1 is currently producing approximately 130,000 barrels per day utilising the Liza Destiny FPSO vessel.
The Liza Phase 2 is meanwhile producing oil using the Liza Unity FPSO. The third project, Payara, is scheduled to begin production at the end of 2023 with a capacity of 220,000 barrels per day from the Prosperity FPSO, which is currently under construction in Singapore.
The fourth project, Yellowtail, is expected to produce 250,000 barrels per day when the ONE GUYANA FPSO comes online in 2025. Exxon already has approval from the Environmental Protection Agency (EPA) for the Payara and Yellowtail developments.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027. The oil company had said that the Liza Phase 2 project will have the capacity to produce 220,000 barrels of oil per day. Exxon had also revealed that the Liza Phase 2 development was funded at the cost of some US$6 billion, including a lease capitalisation cost of approximately $1.6 billion, for the Liza Utility FPSO vessel. For the Phase 2 Development, six drill centres were planned, along with approximately 30 wells – 15 production, nine water injection, and six gas injection wells.
The US$9 billion Payara development, the third development, will meanwhile target an estimated resource base of about 600 million oil-equivalent barrels, and was at one point considered to be the largest single planned investment in the history of Guyana.
The Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, will turn out to be the single largest development so far in terms of barrels per day (bpd) of oil, with a mammoth 250,000 bpd targeted.