Hess Corp. projects 24 oil lifts for 2022
Gregory Hill, Chief Operations Officer of Hess Corporation
Gregory Hill, Chief Operations Officer of Hess Corporation

-Company’s President says Payara more than 66% complete

BY the end of 2022, it is projected that Guyana will have exported 24 million barrels of oil, owing to the execution of 24 oil lifts, at one million barrels per lift.

This is according to projections released by the top brasses of Hess Corporation, which holds a 30 per cent stake in the very lucrative Stabroek Block offshore Guyana.

In providing a breakdown of the company’s 2022 expectations, Executive Vice President, John Riley, said that the mammoth increases in lifts would be largely owing to the operations of not one, but two Floating Production Storage and Offloading (FPSO) vessels – the Liza Destiny, and the much larger Liza Unity which is slated for startup in the coming weeks.

“In the first quarter we expect to have three liftings from Guyana, with two lifts coming from the Liza Destiny and our first lift from the Liza Unity expected to occur at the end of March. In the second quarter, we expect a total of five liftings,” Riley said during a virtual engagement to examine the entity’s fourth quarterly earnings for 2021.

He continued, “After the Liza Unity reaches full production, which is currently projected for the third quarter of this year, we expect to have eight liftings per quarter in Guyana, from these two FPSOs. For the full year 2022, we expect 24 liftings in Guyana.”

Hess Corporation, which is part of an ExxonMobil-led consortium, is currently working with its partners to realise the Payara Development Project, deemed to be the largest single investment in Guyana’s history, estimated to cost more than one trillion Guyana dollars.

In providing an update on the project, Hess Corporation’s President and Chief Operating Officer (COO), Gregory Hill, said that the overall development is at 66 per cent complete, with Subsea Umbilicals, Risers Flowlines (SURF) activities progressing ahead of plan.

“…and we are preparing for a 2022 installation campaign,” Hill said, pointing to the fact that the Payara project consists of 41 wells.

The Payara project will be served by the Prosperity FPSO, which is currently under construction in Singapore. According to Hill, the actual vessel is complete, and topside construction activities are ongoing.
“The government is supportive of the project and startup remains on track for 2025. We look forward to continuing to work with the Government of Guyana and our partners to realize the extraordinary potential of this world class project,” President Hill said.

He noted that despite indications of inflation, the majority of the company’s offshore portfolio is driven by its interests in Guyana.

Prosperity FPSO, which will serve the Payara Development Project, is on course for a 2025 completion

As Guyana’s oil finds continue to grow exponentially, ExxonMobil, along with Hess Corp and their other partners in the Stabroek Block, are preparing to undertake an even more massive task – the Yellowtail Development.

Consisting of 51 wells, the Yellowtail project is estimated to cost approximately G$1.8 trillion (US$9 billion).

“It’s just a bigger project; very large area of extent, very fantastic reservoir. So, it’s going to be one of the world class economics…it’s going to develop new nearly a billion barrels of oil,” Hill related.

Meanwhile, Natural Resources Minister, Vickram Bharrat, had predicted that, with the full-fledged operation of four FPSOs – the Liza Destiny, the Liza Unity, the Prosperity and the Yellowtail – Guyana could begin facilitating up to 50 oil lifts per year at one million barrels per lift, thereby producing 50 million barrels of oil annually.

The Yellowtail FPSO is slated to come on stream by 2026. Further, with crude prices hovering at US$80 a barrel, Guyana would earn as much as US$4,000,000,000 (GYD$836,902,800,000) each year for its 50 oil lifts.

“So, when you crunch the numbers, 50 lifts at a million barrels, and based on the oil price today, if it continues along that trend, you can see or get an idea of the direct proceeds coming to Guyana,” Minister Bharrat said in a past interview with OilNow.

He also reminded that the aforementioned earnings are outside of other benefits such as royalties, which could see a mammoth increase in the country’s overall oil earnings, going forward.

“We are not even talking royalties yet,” Minister Bharrat related.

Guyana currently has $126 billion contained in its Natural Resource Fund (NRF). The People’s Progressive Party/Civic (PPP/C) government is now proposing to withdraw those monies to finance a myriad of projects outlined in Budget 2022.

The proposed withdrawals are in keeping with provisions of the landmark NRF legislation which specifies that oil revenues can only be used to fund developmental projects, once approved by the National Assembly.

As Guyana’s oil earnings are put to use for the first time this year, the government is looking to fund a number of iconic projects and initiatives, including the gas-to-energy project, which aims to cut the cost of electricity by 50 per cent; the continuation of the 20,000 online scholarships initiative; increases in Old Age Pension and the Education Cash Grants; the purchase of more life-saving coronavirus vaccines; as well as the construction of new roads and bridges, which pave the way for infrastructural transformation.

The Budget, which totals $552.9 billion, is likely to be passed in the National Assembly within the coming weeks. Nonetheless, a report compiled by the Inter-American Development Bank (IDB) in 2021 estimates that earnings from Guyana’s oil and gas sector could reach US$31 billion (roughly G$6.7 trillion) by 2035.

The document, titled ‘Economic Institutions for a Resilient Caribbean,’ outlined that Guyana’s population of approximately 780,000 suggests that the level of reserves equates to 10,250 barrels per person.

“Although this measure is lower than that of Kuwait with 24,000 barrels per person), it is higher than that of the United Arab Emirates with 10,100 barrels per person; Venezuela with 9,500 barrels per person; and Saudi Arabia with 8,100 barrels per person, making Guyana one of the richest countries in petroleum reserves in the world,” the IDB report said.

With ExxonMobil, Hess and their partners pursuing a production rate of at least 750,000 barrels of oil per day, Guyana is gearing up to become the largest oil producer on a per capita basis in the world.

SHARE THIS ARTICLE :
Facebook
Twitter
WhatsApp

Leave a Comment

Your email address will not be published. Required fields are marked *

All our printed editions are available online
emblem3
Subscribe to the Guyana Chronicle.
Sign up to receive news and updates.
We respect your privacy.