Hess Sanctions Yellowtail Development, Offshore Guyana

Source: www.gulfoilandgas.com 4/4/2022, Location: South America

- Development of Yellowtail receives government approval
- Yellowtail expected to produce ~250,000 gross barrels of oil per day starting in 2025
- This fourth oil development is the largest to date on the Stabroek Block

Hess Corporation has made a final investment decision to proceed with development of Yellowtail offshore Guyana after receiving government and regulatory approvals. Yellowtail, the fourth oil development and the largest on the Stabroek Block, is expected to produce approximately 250,000 gross barrels of oil per day starting in 2025.

Yellowtail will utilize the ONE GUYANA floating production, storage and offloading vessel (FPSO), which will develop an estimated resource base of approximately 925 million barrels of oil. Six drill centers are planned with up to 26 production wells and 25 injection wells.

Hess’ net share of development costs, excluding pre-sanction costs and FPSO purchase cost, is forecast to be approximately US$2.3 billion, of which approximately US$210 million is expected in 2022, US$430 million in 2023, US$585 million in 2024, US$390 million in 2025 and US$295 million in 2026.

“We are excited to sanction our fourth oil development and the largest FPSO to date on the Stabroek Block,” CEO John Hess said. “We look forward to continuing to work with the Government of Guyana and our partners to realize the remarkable potential of this world class resource for the benefit of all stakeholders. The world will need these low cost oil resources to meet future energy demand and help ensure an affordable, just and secure energy transition.”

The Liza Phase 1 development, utilizing the Liza Destiny FPSO, began production in December 2019; its production capacity is expected to increase to more than 140,000 gross barrels of oil per day following production optimization work currently under way. The Liza Phase 2 development, utilizing the Liza Unity FPSO, began production in February 2022 and is expected to reach its production capacity of 220,000 gross barrels of oil per day later this year as operations are safely brought online. The third development on the block at Payara is on track for production startup in 2024, utilizing the Prosperity FPSO with a production capacity of approximately 220,000 gross barrels of oil per day.

At least six FPSOs with a production capacity of more than 1 million gross barrels of oil per day are expected to be online on the Stabroek Block in 2027, with the potential for up to 10 FPSOs to develop gross discovered recoverable resources of more than 10 billion barrels of oil equivalent.

The Stabroek Block is 6.6 million acres. ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45% interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Petroleum Guyana Limited holds 25% interest.


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