Phase 1 of Guyana’s giant Liza oil field breakeven cost at $35/bl Brent; to fall further – Hess

FPSO Liza Destiny

TORONTO– Phase 1 of Guyana’s giant Liza oil field offshore, which commenced production in December 2019, currently has a breakeven cost of $35/bl Brent, and is set to fall even further.

John Hess, Chief Executive Officer of Hess Corporation, made the disclosure Tuesday at the Argus Americas Crude Summit in Houston, Texas, currently being held from February 3 to 5, Argus Media reported Tuesday.

“The breakeven cost is for the first floating production, storage and offloading vessel (FPSO), Liza Destiny,” Hess said in a keynote address at the international forum.

“With the extra resources that we have just announced, obviously, as you look out into the future, we see the upside for more ships and more production…it’s going to be low cost…it is going to be high returns,” Hess remarked.

ExxonMobil affiliate Esso Exploration and Production Guyana Limited is the operator of the Stabroek Block and holds 45 percent interest. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds 25 percent interest.

“The breakeven for the second FPSO, the Liza Unity, which will be deployed for the second phase of development, will be $25/bl Brent,” Hess said.

According to Argus Media, the Hess Corporation CEO noted that ExxonMobil is anticipating production from the Stabroek block to reach 120,000 b/d “in the coming months,” rising to more than 750,000 b/d by 2025,

The 750,000 barrels per day will catapult the sparsely populated Guyana into the upper ranks of oil-producing countries, Argus Media reported.

Proven oil reserves in the deepwater Stabroek block stand at more than 8 billion barrels of oil equivalent (boe) following the 16th oil discovery in January 2020.


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