With the overall work of the Liza Phase 2 project 90 per cent completed, the Liza Unity Floating Production Storage and Offloading (FPSO) oil platform is set to sail for Guyana in mid-2021.
This was disclosed by Hess Corporation Chief Operating Officer Greg Hill, who said that first oil for the Liza Phase 2 remains on track for early 2022. He noted that the Liza Unity FPSO, with a production capacity of 220,000 gross barrels of oil per day, is preparing to sail from the Keppel yard in Singapore to Guyana by midyear.
“Our discoveries and developments on the Stabroek Block are world class in every respect, and with Brent breakeven oil prices of between $25 and $35 per barrel, represent some of the lowest project breakeven oil prices in the industry,” he said during his presentation at Hess’ quarterly earnings call.
Chief Executive Officer (CEO) John Hess agreed, stating that Guyana is positioned to become a significant cash engine for the Company.
“We have maintained a disciplined capital and exploratory budget for 2021 of $1.9 billion. More than 80% of this year’s capital spend is allocated to Guyana, where our three sanctioned oil developments have a Brent breakeven oil price of between $25 and $35 per barrel, and to the Bakken,” he said.
He added that preserving the long term assets in Guyana is a top priority. He stated that on the Stabroek Block, where Hess has a 30% stake and ExxonMobil is the operator, they have made 18 significant discoveries to date with gross discovered recoverable resources of approximately 9 billion barrels of oil equivalent.
According to Chief Financial officer John Reilly, Hess expects to sell two 1 million barrel cargos from Guyana whereas they sold three 1-million barrel cargos in the first quarter. He added that they expect to sell five 1-million barrel cargos over the second half of the year.
“We continue to see multibillion barrels of future exploration potential remaining,” Hess further added, noting that they have an active exploration and appraisal program this year on the Stabroek block.
He informed that drilling activities are underway for appraisal at the Longtail-3 well and for exploration at the Koebi-1 prospect, while the third oil development on the Stabroek Block at the Payara Field is expected to achieve first oil in 2024, also with a capacity of 220,000 gross barrels of oil per day.
Regarding developments in the Payara Field, Hill said that they are progressing according to plan, with about 38% of the overall work completed. The project will utilise the Liza Prosperity FPSO, which will have the capacity to produce up to 220 thousand gross barrels of oil per day. He stated that FPSO hull is complete and topsides construction activities have commenced in Singapore adding that First oil remains on track for 2024.
“Engineering work for a fourth development on the Stabroek Block, Yellow-tail, is underway with anticipated startup in 2025, pending government approvals and project sanctioning. We continue to see the potential for at least six FPSOs on the block by 2027, and longer term for up to 10 FPSOs to develop the discovered resources on the block,” Hess also said.
Meanwhile, Hill noted that the Stabroek Block exploration programme for the remainder of the year will focus on both Cam-panian, Liza-type reservoirs and on the deeper Santonian reservoirs. He said that key appraisal activities will be targeted in the southeast portion of the Stabroek Block to inform future developments.
In terms of drilling activity, he said, the Uaru-2 well successfully appraised the Uaru-1 discovery and also made an incremental discovery in deeper intervals. “The well encountered approximately 120 feet of high quality, oil bearing sandstone reservoir and was drilled 6.8 miles from the discovery well, implying a potentially large areal extent,” he said.
Hill went on to disclose that the Stena DrillMAX is currently appraising the Longtail discovery and that appraisal is planned at Mako and in the Turbot area, which will help define the fifth and sixth developments on the block. He added that the Stena Carron has commenced exploration drilling at the Koebi-1 well, and an exploration well at Whip-tail is planned to spud in May.
“Further exploration and appraisal activities are planned for the second half of 2021 with a total of approximately 12 wells to be drilled this year. The Noble Tom Madden, the Noble Bob Douglas, and the Noble Sam Croft, which recently joined the fleet, will be primarily focused on development drilling,” he said.
