Hess to sell Gulf project to focus on Guyana
Hess Corp. plans to sell its interest in a Gulf of Mexico deepwater project to BHP Billiton for $505 million.
The New York oil and gas company on Monday said the proceeds from selling its 28 percent interest in the Shenzi Field project to the Australian company will be used to fund operations off the coast of Guyana. The sale is expected to close before the end of the year.
“This sale is aligned with our strategy to preserve cash and preserve the long-termv alue of our assets in the current low oil price environment,” Hess CEO John Hess said in a statement.
Oil and gas companies are expected to sell billions of dollars of assets in the coming years to help weather the industry downturn and prepare for a societal shift to renewable energy sources. Rystad, a Norwegian energy research firm, forecasts that eight oil giants — Exxon Mobil, BP, Shell, Total, Eni, Chevron, Conoco Phillips and Equinor — could sell about $111 billion worth of oil and gas assets in the coming years.
Shenzi Field, located in 4,000 feet ofwater 120 miles off the coast of Louisiana, was once one of the top producing deepwater oil fields in the Gulf of Mexico. Named after amythical dragon, Shenzi reached peak production of 149,500 barrels of oil per day in 2009. Shenzi production plummeted to 11,000 barrels of oil and natural gas per day between January and August 2020 because of pandemic-related output cuts. The field is operated by BHP Billiton.
Hess in January said it discovered more oil in the Stabroek Block off the coast of Guyana, which already was estimated to have at least 8 billion barrels of oil and natural gas. Hess holds a 30 percent interest in the Stabroek Block.