– Govt welcomes new oil find
The Stabroek Block reservoir continues to deliver more oil with yet another discovery made offshore Guyana at the Lancetfish-2 well.
In its third-quarter earnings statement on Wednesday, Hess Corporation announced that the Lancetfish -2 appraisal well in the Stabroek Block has resulted in a significant discovery.
According to Hess, the well encountered approximately 125 feet of net oil pay in appraisal reservoirs and approximately 65 feet of net oil pay in a new discovery interval.
The Lancetfish -2 well was drilled in 5,649 feet of water and is located approximately four miles southeast of the Lancetfish -1 discovery well, where oil was found in April this year by the Stabroek Block operator – ExxonMobil.
In light of the recent find, the Guyana Government stated that it is the fourth offshore discovery for 2023 and brings the total number of discoveries from 2015 to date, up to 46.
In addition to Lancetfish-1 discovery, the other oil finds this year include at Fangtooth SE-1 in the Stabroek Block and at the Wei-1 well in the Corentyne Block.
However, the Lancetfish -2 discovery in the Liza Petroleum Production License area has unveiled an estimated 20 meters of hydrocarbon-bearing reservoir, along with approximately 81 meters of additional hydrocarbon-bearing sandstone.
According to the Natural Resources Ministry, this newly discovered reservoir will undergo a comprehensive appraisal process, which aligns with the ongoing appraisal activities for other discoveries in the region.
Hess Corp currently holds a 30 per cent interest in the Stabroek Block while operator ExxonMobil, through its local subsidiary Esso Exploration and Production Guyana Limited (EEPGL), has a 45 per cent interest and CNOOC holds the remaining 25 per cent stake.
Only earlier this week, it was announced that Hess Corporation has entered into an agreement to merge with another US oil giant, Chevron. According to Hess, this transaction is expected to be closed in the first half of 2024.
Experts have already commented that Chevron’s deep pockets could see more adventurous drilling in the Stabroek Block when it takes over Hess’ Guyana operations next year.
Similar sentiments were shared by Vice President Dr Bharrat Jagdeo when he commented on the merger during a press conference on Thursday.
“We’re pleased that there are two major US oil companies here – these are major oil companies. We believe that they have deep pockets and they can fund the investment programmes necessary to move us to peak production in the earliest point in time,” he stated while adding, “We have examined Chevron carefully and we believe Chevron would be a good partner too in Guyana.”
He went onto note too that Guyana’s historic US$750 million carbon credit deal with Hess remains intact.
“My staff has assured me that we’ve reached out [to Hess] and we’ve been assured that our deal is intact,” the Vice President noted.
According to Jagdeo, the spotlight placed on Guyana during this merger transaction demonstrates the growing importance of the country in the market for the global supply of crude oil.
“The fact that Guyana is an attractive destination for investments is something that we should all be happy about. You have seen globally, a move now by both Exxon and Chevron – the two biggest [oil] companies in the United States of America – to consolidate and also to grow their crude assets. And they’re investing substantial sums of money in acquiring new assets because they are calculating that the global demand for fossil fuel will stay with us for a long time in the future contrary to what we believe or what is being pushed for…,” the VP stated.
Guyana began producing oil on December 20, 2019, in the oil-rich Stabroek Block, which is 6.6 million acres (26,800 square kilometres).
In its third quarter earnings statement, Hess reported that net production from the Liza Destiny and the Liza Unity Floating Production Storage and Offloading (FPSO) vessels totalled some 108,0002 bopd in the third quarter of 2023. This is compared with 98,0002 bopd in the prior-year quarter.
The Stabroek Block partners also sold nine cargos of crude oil from Guyana, one more than the corresponding period last year.
It was reported that during the 2023 third quarter, a mechanical issue on the Liza Destiny FPSO reduced production.
“Repairs were completed by the operator in October that resolved the issue, and production is currently in the range of 150,000 gross bopd to 160,000 gross bopd,” Hess stated.
With two projects already in operation, the Stabroek co-venturers are gearing up for the third development, Payara, with a production capacity of approximately 220,000 gross bopd. This project will start up in the fourth quarter of this year.
Yellowtail, the fourth development project in the Stabroek, was sanctioned in April 2022 with a production capacity of approximately 250,000 gross bopd and first production is expected in 2025.
Additionally, the fifth development, Uaru, was sanctioned in April 2023 with a production capacity of approximately 250,000 gross bopd with first production slate for 2026.
The Stabroek Block operator only last week submitted the Field Development Plan for the sixth project, Whiptail, to the Guyana Government.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027. (G-8)