Hess Corporation CEO reveals breakeven cost for offshore Guyana
February 10th, 2020 – Georgetown, Guyana – One month into first oil, Guyana becomes an energy exporter in the global market. US-based independent Hess Corporation released breakeven estimates in the Stabroek block with CEO John Hess quoted as saying;
“The breakeven cost of the recently started giant offshore field in Guyana is currently $35/bl Brent and is set to fall further…”
Breakeven points provide an objective basis for comparison of global oil fields, and impact on field development decisions and reserves estimates. Guyana ranks towards the lower end of the global scale, where the lowest breakeven points are found in the Middle East (approx. $27 USD /bl Brent) and the highest in the Arctic (approx. $75 USD /bl Brent). Considering the Stabroek block is in deepwater offshore, the breakeven costs are amongst the lowest in the world. The costs in the table shown are from 2015, and do not take into consideration the significant downturn in the industry that began mid 2014.
Estimates of reserves in Guyana continue to increase, currently at 8 billion oil-equivalent barrels. Successful exploration wells offshore Suriname (close to the maritime border and within proximity of some successful discoveries in Guyana), suggest companies operating there may soon announce reserves estimates.
Says Lars Mangal, CEO TOTALTEC, “The breakeven cost as estimated by Hess place Guyana in a very competitive position on the global market, making the other offshore blocks attractive as an investment opportunity. This is year one for Guyana as an oil exporter, and we begin in a highly competitive position relative to other established players. The already low – and according to Hess, falling – breakeven costs are an indication of positive economics for the Stabroek block, and for Guyana as a country.”
Earlier in January, ExxonMobil shipped 1 million barrels of Liza light sweet crude to be refined on the US Gulf Coast. The second lift of Guyanese crude is already in progress, with sources indicating a tanker arriving at the Liza FPSO to collect the cargo.
ExxonMobil production will continue to increase as the Liza Phase 1 development ramps up to produce 120,000 barrels per day in the coming months. The Liza Phase 2 development is expected to begin production mid 2022.
Read more about breakeven costs here: https://www.stabroeknews.com/2016/11/13/features/guyana-oil-break-even-price/
TOTALTEC Oilfield Services is focused on the success of the oil industry in Guyana for the benefit of the country, its people, and partner companies. It does this through three areas: people, partnerships, and facilities. Qualified and motivated Guyanese develop through the International Petroleum & Maritime Academy. Partnerships prioritize products and services that are starting points to grow from, creating new Guyanese led companies. Examples are Guyana Shore Base, Inc. providing support to offshore operations and Jaguar Oilfield Services offering a complete range of lifting equipment and inspection services. The 94% Guyanese TOTALTEC workforce includes 8 nationalities with over 160 years of international oilfield experience. https://www.totaltec-os.com