The Search for Oil in Guyana: Past and Present – By Nigel Westmaas

The Search for Oil in Guyana: Past and Present

Nigel Westmaas | Stabroek News – 

But for the name “British Guiana” the title in the image above could have been written in 2016.

Yet, this eerily contemporary statement actually came from a Daily Chronicle editorial published on November 18, 1930, some 86 years ago. The editorial called on British Guianese to be “oil minded” as “the first stepping stone to progress along the lines of oil development…” adding that “there is a fair prospect of the colony developing a lucrative oil industry…”  

It urged “every man, woman and child” to “think oil, dream oil, and co-operate in virile campaigns with the object of inducing our masters at Downing Street to lift the pernicious ban.” The ban or restriction in question was a likely reference to the British (Mineral Oil) Regulations of 1912.    

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  • Clyde Duncan  On October 25, 2017 at 7:02 pm

    Hess Sells North Sea Assets with Guyana Find in Mind

    Alex Nussbaum | Bloomberg

    With $2.7 billion in oilfield sales this week, Hess Corp. is making a calculated bet, giving up steady production today to help fund what could be one of the world’s biggest discoveries into the next decade.

    The oil explorer with operations on five continents said Tuesday that it’s selling North Sea assets off of Norway for $2 billion and seeking a buyer for wells off of Denmark.

    The news came a day after Hess sold drilling rights in offshore Equatorial Guinea for $650 million. Counting a June deal to sell properties in Texas, the New York-based company has sold off almost $3.3 billion in assets this year.

    With the makeover, Hess is building a war chest to help develop a discovery off the coast of Guyana in South America that may hold the equivalent of 2.5 billion barrels of oil, according to company estimates. Its partner in the project, Exxon Mobil Corp., has said the initial building phase may cost $4.4 billion and take until 2020 to deliver its first oil. The payoff: More than a decade of growth for Hess shareholders.

    The divestments “all make strategic sense” and “will help bridge the sizable funding gap that Hess faces over the next few years,” Capital One Securities analyst Phillips Johnston said in a note to clients Tuesday. “These assets have not been competing for capital, so by monetizing them, Hess will prefund part of the development of its major Guyana discoveries.”

    Still, there’s a trade-off, Johnston said. Hess is giving up operations that produced 16 percent of its total oil volumes and almost a quarter of its earnings before interest, taxes, depreciation and amortization, he said.

    Hess is due to announce its third-quarter earnings on Wednesday. After opening the day up, the shares fell 2.4 percent to $44.14 at 12:34 p.m. in New York trading.

    Before Tuesday, the shares had fallen 27 percent for the year, putting them among the ten worst performances on the S&P 500 Energy Index.

    Hess had telegraphed its North Sea sales, so investors may have discounted some of the gains, said Charles Robertson, a Cowen & Co. analyst in New York.

    The total sales proceeds are also more than the explorer’s projected share of the Guyana project and some may question whether the company was selling too much, he wrote in a research note. Hess has estimated that its share of the project’s initial phase will be about $1 billion.

    Other Uses

    Robertson sees other uses for the money as well. It could help Hess expand drilling in the Bakken shale basin in North Dakota, the analyst said, and with exploration in Guyana set to continue, “these sales give Hess financial flexibility to develop future discoveries.”

    Hess, in a statement, said there would be other benefits: $500 million of the proceeds will be used to retire debt next year and the company also gets to cancel $3.2 billion in liabilities for closing and cleaning up the operations it’s selling.

    Hess also announced a goal of cutting $150 million in annual expenses, a plan that will lower its per-barrel production costs 30 percent by 2020, it said.

    “We are focusing our portfolio on higher return assets and reducing our break-even oil price,” Chief Executive Officer John Hess

    To contact the reporter on this story: Alex Nussbaum in New York at

    To contact the editors responsible for this story: Reg Gale at, Carlos Caminada

    ©2017 Bloomberg L.P

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