Hess Frees Up US$505 Million To Fund Guyana Oil Development

exxon-payara-development
Exxon/Hess Payara development
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By NAN Business Editor

News Americas, MIAMI, FL, Weds. Oct. 7, 2020: On the heels of the new Guyana government’s much criticized approval of Exxon’s US 9 billion Payara Development project, its 30 percent stakeholder has freed up US$505 to invest further in the opportunity.

Hess Corporation CEO John Hess said this week it has entered into an agreement to sell its 28% working interest in the Shenzi Field in the deep-water Gulf of Mexico to BHP Billiton, the field’s operator, for a total consideration of US$505 million. The deal is subject to customary adjustments, with an effective date of July 1, 2020.

“Proceeds will be used to fund our world class investment opportunity in Guyana,” Hess said in a brief statement on Monday.

The transaction is expected to close before year end 2020 and is subject to customary closing conditions. Hess Corp. recently also announced plans to invest approximately US$1.8 billion in the Payara Development project, excluding pre-sanction costs and Floating Production Storage and Offloading (FPSO) purchase cost.

The company said that it made a final investment decision to proceed with development of the Payara Field offshore Guyana after the development plan got the go-ahead from the Government of Guyana last Wednesday.

The Stabroek Block is 6.6 million acres. ExxonMobil affiliate Esso Exploration and Production Guyana Limited is the operator and holds 45 percent interest. Along with Hess’ 30 percent, CNOOC Petroleum Guyana Limited, a wholly owned subsidiary of CNOOC Limited, holds 25 percent interest in the Stabroek Block.

Payara is the third Field Development Plan (FDP) in the Stabroek Bock to gain approval. The first FDP that the Guyana Government approved was for Liza Phase One, while Liza Phase Two is expected to start up in 2022.

The Liza Phase 1 development, with a production capacity of 120,000 gross barrels of oil per day, achieved first oil in late 2019. Liza Phase 2 remains on track to achieve first oil by early 2022. It will produce up to 220,000 gross barrels of oil per day at peak rates using the Liza Unity FPSO, which is under construction in Singapore.