Hess well adds to Guyana’s oil boom
Hess Corp. on Tuesday said it made another oil discovery off the coast of Guyana.
The New York oil and gas company struck oil at its Redtail-1 well. It is the company’s 18th discovery in the Stabroek Block, which is expected to contain more than 8 billion barrels of oil and natural gas in what is part of a larger offshore oil field. Hess said it found 232 feet of oil-bearing sandstone under 6,164 feet of water.
In addition, Hess said it found more oil next to to its Yellowtail-1 discovery in a well called Yellowtail-2.
“The Redtail-1 and Yellowtail-2 discoveries further demonstrate the significant exploration potential of the Stabroek Block and will add to the recoverable resource estimate of more than 8 billion barrels of oil equivalent,” CEO John Hess said in a statement.
The Stabroek Block, which spans 6.6 million acres off South America’s northeast coast, is owned by subsidiaries of Hess, Exxon Mobil, and China National Offshore Oil Corp.
Producers believe they can turn a profit at lower oil prices in the waters off Guyana and Suriname, which has also drawn the attention of Chevron, Total and Apache.
Drilling in Guyana, however, stalled during the early months of the coronavirus pandemic when
the country closed its borders to control spread of the virus. Production restarted in June. Drilling also was hampered by a political standoff that was settled in August with the naming of a new president after a five-month election crisis.
The English-speaking country became a global oil hot spot after Exxon drilled the offshore reserve in 2015. The windfall is expected to transform the country of 780,000, with the economy forecast to expand by 53 percent this year, according to the International Monetary Fund.
Largely because of the potential in Guyana, Hess was a top stock performer in the energy sector last year.
Hess shares Tuesday closed down $1.45 or about 3 percent to close at $45.70 on a day when wider markets were also down several percent.