Chevron (CVX.N) has agreed to buy smaller rival Hess (HES.N) in a $53 billion all-stock deal that will help the oil major secure a foothold in oil-rich Guyana.
The deal makes Chevron a partner with Exxon (XOM.N) in Guyana's booming oilfields, which are expected to generate 1.2 million barrels of oil per day by 2027.
Hess is part of a consortium, including Exxon Mobil Corp and CNOOC (0883.HK), that operates in Guyana and has made more than 30 discoveries in the country's offshore waters since 2015. Exxon had a 45% stake in the consortium with Hess owning 30% and CNOOC having a 25% stake.
Guyana received bids for eight out of the 14 offshore oil and gas exploration blocks that it had offered in its first auction, held in September. Here are some of the key exploration areas, projects and estimated output in Guyana.
BLOCKS:
- Stabroek block: A 6.6-million-acre (26,800 sq km) offshore area controlled by Exxon, Hess and CNOOC.
- Corentyne and Demerara blocks: A combined area of about 2.5 million acres were being explored by Canadian-registered CGX Energy (OYL.V) and Frontera Energy (FEC.TO). In June 2022, Frontera said it had come to a mutual agreement in principle with Guyana to relinquish the Demerara block.
In Corentyne, the consortium has made oil discoveries in Wei-1 and Kawa-1 wells. The partners are conducting an analysis of the Wei-1 well before deciding whether to upgrade an exploration license to its development phase, Frontera said in August this year.
PROJECTS:
- Liza 1: A development that began crude output in late 2019 and has a production capacity of up to 150,000 barrels per day (bpd) from its Liza Destiny floating production vessel.
- Liza 2: Began production in early 2022 and can produce up to 250,000 bpd at full capacity. It is using a production vessel called the Liza Unity that arrived in Guyanese waters in 2021.
- Payara: A discovery disclosed in January 2017 with first oil expected early in the fourth quarter, estimated to add 15,000 barrels of oil per day initially. It will use a new production vessel, the Prosperity, that would be able to pump up to 220,000 bpd.
- Yellowtail: The consortium plans to spend $10 billion to develop Yellowtail, the 13th discovery at the Stabroek block, and use the vessel One Guyana to produce up to 250,000 bpd at the project. First oil is expected in 2025.
- Uaru: The fifth project at the Stabroek block has already been sanctioned with the Exxon-led consortium expecting to spend $12.7 billion on the project. A vessel named Errea Wittu would produce oil there with a production capacity of 250,000 bpd. First oil is expected in 2026 and would put the consortium's total production in Guyana above 1 million bpd.
- Whiptail: A sixth project where Exxon and partners expect to spend $12.9 billion. The consortium has already submitted its development plan for the project to Guyana and expects to drill up to 72 wells with development drilling scheduled from late 2024 through mid-2030.
(This story has been corrected to change Hess Corp's stake to 30% from 23% in paragraph 3)
