Hess CEO gives upbeat forecast on oil demand, but says Guyana has only scratched the surface of its potential
By Sheila Dang
HOUSTON, January 7 - Hess Chief Executive John Hess said on Tuesday that he believes the oil market is closer to being in balance than it is oversupplied, despite concerns about China's demand and increased production by non-OPEC and U.S. producers.
In remarks made to investors at Goldman Sachs Energy, CleanTech and Utilities Conference, he expressed an optimistic outlook on the shale market and Guyana's prospects as an oil producer. Hess warned that the market may be volatile in 2018, citing political risks in Iran and Venezuela.
Hess said that the demand was stronger than expected. Analysts were looking at a projected inventory build of one million barrels per a day. This has been reduced by half.
Hess said that the future of the company in Guyana is still uncertain, as the production from the discoveries made to date has not yet begun. He stated that the Guyana joint-venture with Exxon and CNOOC will add two additional vessels in 2026 or 2027 to bring the total up to six vessels. Hess stated that even then, the six vessels will only be able to tap five out of the 11 billion bbls equivalent of oil discovered thus far.
Hess says investors can expect more efficiency from shale drilling. This will help offset the fact shale, except for the Permian oilfield, has been around for 20 years.
Hess produces 200,000 barrels of shale oil per day, and will continue to do so for "the next 10 years," according to the official. Chevron's deal to buy Hess for $53 billion has been held up by an arbitration dispute between Exxon Mobil, Hess’s partners in the Guyana joint venture and CNOOC. They claim they have a right to first refusal on any sale of Hess’s Guyana assets.
Hess stated on Tuesday that the decision will be rendered in the arbitration case before late August or early September.
Hess stated, "We are very confident that this merger will go through. We're preparing for it." Sheila Dang reported from Houston and Alistair Bell edited the story.
(source: Reuters)
