US-based oil and gas firm Hess has begun production at its oil facility in Guyana, the company said in a press statement.

Located on the Stabroek Block – a 6.6 million-acre development operated by ExxonMobil Guyana – the Payara development will produce an initial 220,000 gross barrels of oil per day over the first half of 2024 as new wells are brought into function.

According to Hess, the newly functioning oil wells will increase production capacity on the Stabroek Block to 620,000 barrels of oil each day.

“We are proud to be a partner in the successful development of this world-class oil resource for the benefit of the people of Guyana and all other stakeholders and congratulate ExxonMobil as operator for outstanding project execution,” said John Hess, CEO of Hess corporation. “The world will need these low-cost oil resources to meet future energy demand and help ensure an affordable, just and secure energy transition.”

To extract the oil, Hess is using the Prosperity floating production, storage and offloading (FPSO) vessel. In total, six FPSOs with a capacity of extracting over 1.2 million barrels of oil daily are expected to begin operations on the Stabroek Block by the end of 2027.

Russia’s war in Ukraine and a volatile oil market are forcing investors to look into alternative fossil fuel producers. Guyana boasts around 13.6 billion barrels of oil reserves, the US Geological Survey claims, with 32 trillion cubic feet of gas reserves estimated alongside the country’s coastline as well.

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ExxonMobil is a publicly traded oil and gas giant with a market capitalisation of $412.78bn as of 14 November. The company holds 45% interest in the Stabroek Block, while Hess Guyana Exploration (a subsidiary of Hess) has a 30% stake in the development.

CNOOC Petroleum Guyana Limited, a subsidiary of state-owned Chinese giant China National Offshore Oil Corporation, holds the remaining 25%.