Hess Sanctions Whiptail Development Offshore Guyana
- Hess makes a final investment decision for the Whiptail development on the Stabroek Block.
- Whiptail is expected to add gross production capacity of approximately 250,000 barrels of oil per day by the end of 2027.
- The $12.7 billion Whiptail development targets an estimated resource base of over 850 million barrels of oil.
- Hess plans to have six FPSOs online by the end of 2027 with a total gross production capacity of 1.3 million barrels of oil per day.
- None.
Insights
The approval of the Whiptail development represents a significant expansion in the energy sector, particularly in oil production. With an additional 250,000 barrels of oil per day, this project could contribute to stabilizing global oil supply and potentially influence oil prices. The gross production capacity of 1.3 million barrels per day by the end of 2027 aligns with the industry's ongoing efforts to meet global energy demands while also navigating the complexities of energy transition.
From an investment perspective, the commencement of production at Whiptail could enhance Hess Corporation's revenue streams and profitability, given the substantial resource base of over 850 million barrels of oil. However, investors should also consider the capital expenditure of $12.7 billion and the project's break-even oil price in their valuation models. The long-term nature of the project means that returns would not be immediate and the investment is subject to risks such as fluctuating oil prices and regulatory changes.
The involvement of Hess Corporation in the Stabroek Block, located off the coast of Guyana, adds a geopolitical dimension to the project. The collaboration with the Government of Guyana indicates a positive bilateral relationship, which is essential for the smooth execution of such large-scale developments. However, geopolitical stability in the region is a critical factor that could affect the project's timeline and profitability.
Furthermore, the partnership structure with ExxonMobil and CNOOC reflects a diversified risk profile and highlights the importance of international cooperation in the energy sector. Investors should monitor regional political dynamics and any potential disputes that could impact the project's progress or the security of the investment.
As the global community shifts towards sustainable energy practices, the environmental impact of oil production is under increased scrutiny. The Whiptail development must adhere to stringent environmental standards to mitigate any negative effects on the marine ecosystem. Moreover, the project's alignment with a 'just and secure energy transition' will be closely watched by ESG-focused investors.
Given the scale of the project, Hess Corporation's commitment to responsible environmental stewardship and social responsibility will be critical. The company's ESG performance, including its carbon footprint and impact on local communities, will influence investor sentiment and could impact the stock's appeal to sustainability-conscious investors.
- Whiptail development receives government approval; production targeted to begin in 2027
- Sixth Stabroek Block development will add gross production capacity of approximately 250,000 barrels of oil per day
- On track to deliver gross production capacity on the block of approximately 1.3 million barrels of oil per day by end of 2027
The
“We are excited to sanction Whiptail, our sixth oil development on the Stabroek Block, and remain on track to have six FPSOs online by the end of 2027 with a total gross production capacity of approximately 1.3 million barrels of oil per day,” CEO John Hess said. “We are proud to work with the Government of
Three developments on the Stabroek Block -- Liza Phase 1, Liza Phase 2 and Payara -- are currently producing more than 640,000 gross barrels of oil per day. The fourth and fifth developments, Yellowtail and Uaru, are in progress with production startup targeted for 2025 and 2026 respectively. Each will have a gross production capacity of approximately 250,000 barrels of oil per day.
The Stabroek Block is 6.6 million acres. ExxonMobil Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Petroleum Guyana Limited holds 25 percent interest.
Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. More information on Hess Corporation is available at www.hess.com.
Cautionary Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “anticipate,” “estimate,” “expect,” “forecast,” “guidance,” “could,” “may,” “should,” “would,” “believe,” “intend,” “project,” “plan,” “predict,” “will,” “target” and similar expressions identify forward-looking statements, which are not historical in nature. Our forward-looking statements may include, without limitation, the expected number, timing and completion of our development projects and estimates of capital and operating costs for these projects; estimates of our crude oil and natural gas resources and levels of production; and our future financial and operational results. Forward-looking statements are based on our current understanding, assessments, estimates and projections of relevant factors and reasonable assumptions about the future. Forward-looking statements are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations of future results expressed or implied by these forward-looking statements. The following important factors could cause actual results to differ materially from those in our forward-looking statements: fluctuations in market prices or demand for crude oil, natural gas liquids and natural gas, including due to competing or alternative energy products and political conditions and events; potential failures or delays in increasing oil and gas reserves, including as a result of unsuccessful exploration activity, drilling risks and unforeseen reservoir conditions, and in achieving expected production levels; changes in laws, regulations and governmental actions applicable to our business, including legislative and regulatory initiatives regarding environmental concerns; the ability of our contractual counterparties to satisfy their obligations to us, including the operation of joint ventures which we may not control; unexpected changes in technical requirements for constructing, modifying or operating exploration and production facilities and/or the inability to timely obtain or maintain necessary permits; potential disruption or interruption of our operations due to catastrophic and other events, including climate change; risks and uncertainties associated with our proposed merger with Chevron Corporation; and other factors described in Item 1A—Risk Factors in our Annual Report on Form 10-K and any additional risks described in our other filings with the Securities and Exchange Commission. As and when made, we believe that our forward-looking statements are reasonable. However, given these risks and uncertainties, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made and there can be no assurance that such forward-looking statements will occur and actual results may differ materially from those contained in any forward-looking statement we make. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.
We use certain terms in this release relating to resources other than proved reserves, such as unproved reserves or resources. Investors are urged to consider closely the oil and gas disclosures in Hess Corporation’s Form 10-K, File No. 1-1204, available from Hess Corporation, 1185 Avenue of the
View source version on businesswire.com: https://www.businesswire.com/news/home/20240411200646/en/
Investors:
Jay Wilson
(212) 536-8940
jrwilson@hess.com
Media:
Lorrie Hecker
(212) 536-8250
lhecker@hess.com
Source: Hess Corporation
FAQ
What is the latest development announced by Hess on the Stabroek Block?
What is the expected gross production capacity of the Whiptail development by the end of 2027?
How many FPSOs does Hess plan to have online by the end of 2027?
Who is the operator of the Stabroek Block where the Whiptail development is taking place?
What percentage interest does Hess Guyana Exploration hold in the Stabroek Block?
