–following sale of Demark shares
ONE of the world’s leading energy companies, Hess Corporation, plans to widen its investment portfolio in Guyana with an injection of close to US$150M (G$32.7B), funds which the company garnered from the recent sale of its shares in the Denmark market.
Hess Corporation, one of the companies engaged in exploration activities offshore Guyana, announced recently that it has entered into an agreement with Norway’s INEOS Oil and Gas for the sale of its subsidiary, Hess Denmark, which holds a 61.5 per cent interest in the South Arne Field. The South Arne Field produced an average of 5,800 barrels of oil equivalent per day net to Hess in the fourth quarter of 2020.
The sale is expected to close in the third quarter of 2021, subject to the government’s approvals and customary closing conditions.
“The sale of our Denmark asset enables us to further focus our portfolio, and strengthen our cash and liquidity position,” Chief Executive Officer (CEO) of Hess Corporation, John Hess said in a recent statement.
Hess further said that proceeds will be used to fund the company’s “world-class” investment opportunity in Guyana.
This announcement by Hess Corporation comes one day after Guyana’s President, Dr. Irfaan Ali, said that this nation is poised to become the most exciting investment destination in the Western Hemisphere.
“We welcome investment in the Guyana Basin, as well as the multiple opportunities it will spawn within our economy… I want to take just a few moments to say to all potential investors that you need to come; you need to explore, and you need to look holistically at the varied opportunities in Guyana.
“Whether it is large-scale agriculture production, whether it is mining, whether it is forestry, whether it is in the healthcare system, the education system, you need to understand the varied opportunities Guyana offers for different types of investors. It is not only about oil and gas; oil and gas has really brought attention to Guyana, a sleeping giant in investment opportunities,” President Ali said at the opening of the virtual Guyana Basins Summit 2021 (GBS) on Wednesday.
President Ali has said already that Guyana is on course to prosperity, with a diverse economy that is yet to reach its peak.
“Our economic prospects have never been brighter; our collective feet are firmly placed on the first rungs of a ladder to prosperity that is clearly within our sight,” President Ali said during his address to the nation on January 1, 2021.
The year 2021, according the Head-of-State, will be the springboard from which Guyana will leap into recovery, rebuilding the economy, enhancing the people’s health, and lifting up the vulnerable groups in society.
Guyana’s prospects have been the subject of discussion on the international stage, with Norwegian independent energy research and business intelligence firm, Rystad Energy, being the latest agency to announce that 2021 holds “a lot of promise” for Guyana’s burgeoning petroleum sector.
According to Rystad, the oil giant, ExxonMobil, operator of the Stabroek, Canje and Kaieteur blocks offshore Guyana will be spearheading the local exploration activities, having already set an ambitious divestment target of $15 billion, by expelling mature assets in Asia, Europe and Africa, so as to prioritise investments in “high-value” assets such as Stabroek.
According to Rystad Energy, the company’s drilling activity will focus on “firming up” resources in the south-eastern part of the Stabroek Block, where deeper plays have been observed underneath the existing discoveries.
The Stabroek Block is 6.6 million acres (26,800 square kilometers), with current discovered recoverable resources estimated at more than nine billion oil-equivalent barrels. The 18 discoveries on the block to date have established the potential for at least five floating production, storage and offloading (FPSO) vessels producing more than 750,000 barrels of oil per day by 2026.
ExxonMobil affiliate, Esso Exploration and Production Guyana Limited, is operator of the offshore Stabroek Block, with a 45 per cent interest. Hess Guyana Exploration Limited holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds a 25 per cent interest.
Current development activities at the Stabroek Block include the Liza Phases One and Two, and the Payara projects. ExxonMobil’s first offshore Guyana project, Liza Phase One, began producing in late 2019, well ahead of the industry average for development time. Liza Phase Two remains on track to begin producing oil by early 2022. Liza Phase Two will produce up to 220,000 barrels of oil per day at peak rates, using the Liza Unity FPSO, which is under construction in Singapore.
Payara is the company’s third project in the Stabroek Block, and is expected to produce up to 220,000 barrels of oil per day, after start-up in 2024, using the Prosperity FPSO vessel.