2023-10-23 19:15:00
(Corrects Hess Corp. ownership from 25% to 30% in paragraph 3)
Chevron CVX.N has agreed to buy smaller rival Hess HES.N in a $53 billion stock transaction that will allow the oil major to expand into oil-rich Guyana.
The deal makes Chevron a partner of Exxon XOM.N in Guyana’s booming oil fields, which are expected to produce 1.2 million barrels of oil per day by 2027.
Hess is part of a consortium, including Exxon Mobil Corp and CNOOC 0883.HK, which operates in Guyana and has made more than 30 discoveries in the country’s offshore waters since 2015. Exxon held a 45% stake in the consortium, Hess holding 30% and CNOOC a 25% stake.
Guyana has received bids for eight of the 14 offshore oil and gas exploration blocks it offered at its first auction, which was held in September. Here are some of the main exploration areas, projects and estimated production in Guyana.
BLOCS:
– Bloc Stabroek: An offshore zone of 6.6 million acres (26,800 km²) controlled by Exxon, Hess and CNOOC.
– Corentyne and Demerara Blocks: A combined area of approximately 2.5 million acres was explored by CGX Energy OYL.V and Frontera Energy FEC.TO, two companies registered in Canada. In June 2022, Frontera said it had reached an agreement in principle with Guyana to relinquish the Demerara bloc.
At Corentyne, the consortium made oil discoveries in the Wei-1 and Kawa-1 wells. The partners are conducting an analysis of the Wei-1 well before deciding whether to move an exploration license to the development phase, Frontera said in August this year.
PROJECTS:
– Liza 1: A development that began producing crude in late 2019 and has a production capacity of up to 150,000 barrels per day (bpd) from its floating production vessel Liza Destiny.
– Liza 2: started production in early 2022 and can produce up to 250,000 bpd at full capacity. It uses a production vessel called Liza Unity which arrived in Guyanese waters in 2021.
– Payara: A discovery disclosed in January 2017, the first oil of which is expected at the beginning of the fourth quarter, initially estimated at 15,000 barrels of oil per day. It will use a new production vessel, the Prosperity, which might pump up to 220,000 bpd.
– Yellowtail: The consortium plans to spend $10 billion to develop Yellowtail, the 13th discovery in the Stabroek block, and use the One Guyana vessel to produce up to 250,000 bpd as part of the project. The first oil production is planned for 2025.
– Uaru: The fifth project of the Stabroek block has already been approved and the Exxon-led consortium plans to spend $12.7 billion on this project. A ship named Errea Wittu will produce oil there with a production capacity of 250,000 bpd. First oil production is planned for 2026 and would bring the consortium’s total production in Guyana to more than one million bpd.
– Whiptail: A sixth project on which Exxon and its partners plan to spend $12.9 billion. The consortium has already submitted its development plan for the project in Guyana and plans to drill up to 72 wells, with development drilling planned from late 2024 to mid-2030.
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