LAST week, Hess Corporation, which owns a 30 percent stake in the Stabroek Block, held its first quarterly earnings call of 2023. Chief Executive Officer John Hess highlighted Hess’ strategy of delivering high-return resource growth while maintaining their company’s position in the industry as a leader environmentally, socially, and in governance. Guyana, now ranked as one of the world’s preeminent new oil regions, played a significant role.

That news was confirmed a day later when ExxonMobil, operator of the Stabroek block announced its final investment decision (FID) on the Uaru project—a US $12.7 billion investment in Guyana that would add another 250,000 barrels per day (BPD) in production. FID is a critical final-stage commitment to moving forward with a project and only comes after extensive government and regulatory approvals are complete.

One of the main themes of the earnings call was the high production output already underway in Guyana. In Q1, the Liza Destiny and the Liza Unity floating production, storage and offloading (FPSO) vessels produced an average of 375,000 BPD. The start of the Prosperity FPSO later this year at the Payara project is expected to push that past half a million BPD with an additional 220,000 barrels per day. The addition of Uaru would also help push Guyana to an estimated 1.2 million BPD by 2027.

That potentially represents billions of US dollars in revenue, on top of the US $1.4 billion that is already in the Natural Resources Fund.

Already, Guyana has demonstrated that its oil and gas sector is moving at a rapid pace of development in the first three months of this year. As Guyana’s oil and gas sector continues to grow, with increased exploration and production at the Stabroek Block, local content will play an integral role.

Speaking earlier this month at a press conference, Vice President Dr. Bharrat Jagdeo reiterated that the pace at which Guyana is developing its resources is critical to ensuring sustainable returns on investments for local businesses, saying, “We’re encouraging a lot of Guyanese to invest in this sector. We are doing a lot of carving. The Guyanese, who we’re encouraging to invest, we don’t want their investments or their skills to be stranded.”

This pace of development is underscored by the numbers that came out of Hess’ earnings call, including the expectations for the Payara project. After that, the Yellowtail project will utilise the One Guyana FPSO with a production capacity of about 250,000 BPD and first production slated for 2025. ExxonMobil made the FID on that project last year.

Uaru would be the fifth development on the Stabroek Block and was recently granted full government and regulatory approvals leading to the FID. MODEC—a highly respected Japanese oil and gas service company—will be constructing the FPSO for the project, which will be called the Errea Wittu. The Uaru US$12.7 billion (GY$2.638 trillion) project is expected to be the largest ever project to date offshore Guyana.

President of ExxonMobil Upstream Company Liam Mallon, on the advancement of the Uaru development in a recent press release, announced, “Our fifth, multi-billion-dollar investment in Guyana exemplifies ExxonMobil’s long-term commitment to the country’s sustained economic growth. Our Guyana investments and unrivalled development success continue to contribute to secure, reliable global energy supplies at this critical time.”

Looking ahead, Hess outlined a broad goal for future developments in Guyana. “On the Stabroek Block in Guyana, we currently have line of sight to six floating production, storage and all floating vessels, or FPSOs, in 2027 with a gross production capacity of more than 1.2 million barrels of oil per day.” This is a good thing for the country as increased production is inextricably linked to more oil revenues, and more oil revenues will continue to support the diversification of Guyana’s economy.