Hess to Focus on Deepwater Gulf of Mexico, Offshore Malaysia Projects
Hess Corp. has reported an exploration and production capital and exploratory
budget of $2.4 billion for 2016, a 40% reduction from its 2015 actual spend of
$4.0 billion.
The
$2.4-billion budget is allocated as follows: $610 million (25%) for production,
$820 million (34%) for developments, $500 million (21%) for exploration and
appraisal activities, and $470 million (20%) for unconventional shale resources.
According to the operator, net production is forecast to average between 330,000
and 350,000 boe/d in 2016.
The
company has allocated $375 million for production activities in the deepwater
Gulf of Mexico, including the drilling and completion of a production well and
completion of a water injection well at the Tubular Bells field (operator with
57.1%), a production well at the Conger field (operator with 37.5%), and a water
injection well at the BHP-operated Shenzi field (Hess 28%).
In
Europe, it has assigned $140 million to complete the current stage of the Phase
3 drilling campaign at the South Arne field (operator with 61.5%) offshore
Denmark by the end of 1Q and for operations at the BP-operated Valhall field
(Hess 64%) offshore Norway.
At
the Carigali Hess-operated Joint Development Area in the Gulf of Thailand (Hess
50%), $50 million is allocated to complete the Booster Compression project and
processing of new broadband seismic data.
For
developments, the company has allotted $375 million to progress full field
development of the North Malay basin project offshore Malaysia. Hess is the
operator with 50% interest.
At
the Stampede field in the deepwater Gulf of Mexico, $325 million is reserved to
integrate hull and topsides, install subsea umbilicals, risers and flowlines,
and begin drilling. It is the operator with 25% interest.
At
the Esso Exploration and Production Guyana Ltd.-operated Liza oil field, the
company has allotted $70 million pre-development activities.
It has 30% interest in the field.
Also offshore Guyana, the company has assigned $250 million to drill up to four
wells on the Stabroek block that include evaluating the Liza discovery, a
drillstem test, and additional exploration activities.
It
has allocated $175 million for drilling in the deepwater Gulf of Mexico
including an appraisal well to delineate the Chevron-operated Sicily discovery
(Hess 25%) and an exploration well at the ConocoPhillips-operated Melmar
prospect (Hess 35%), a large Paleogene four-way structure in the Perdido
Foldbelt.
Greg Hill, president and COO, stated: “We take a long-term view to managing our
business and we will continue to invest in our growth projects and prospects,
including exploration and appraisal activities.
“However, in response to the current low oil price environment, we have
significantly decreased our 2016 capital and exploratory expenditures and we
plan to reduce activity at all of our producing assets. Moreover, we will
continue to pursue further cost reductions and efficiency gains across our
portfolio.”