Business News of Tuesday, 15 January 2013

Source: Economic Tribune

US firm pumps $6.8bn into oil industry

US independent Hess is targeting more exploration work on the Deepwater Tano/Cape Three Points block off Ghana, which it operates with a 90% stake, despite a planned cut in overall budget this year.

The company plans to cut overall expenditure by 18 percent this year while maintaining a strong investment focus on unconventional shale plays.

In December, 2012, Hess announced that its Pecan-1 exploration well located in the Deepwater Tano/Cape Three Points block offshore Ghana, had encountered oil pay.

The company had earlier completed drilling operations on the Ankobra-1 well, on the same license block but no commercially significant hydrocarbons were hit upon.

Hess subsequently acquired 1,006 sq km of new 3D seismic in anticipation of the drilling of the Pecan-1well, which turned out to be successful.

The company, under its 2013 capital budget unveiled last week, plans to pump $6.8 billion into exploration, production and development as well as marketing and refining, down from $8.3 billion last year.

Some $2.7 billion, or around 40 percent, is to be allocated to development of shale resources in the US including exploitation of the Bakken play in North Dakota, where it eyes a rig count of 14, and appraisal work in the Utica shale of Ohio, where spending will increase 33 percent to $400 million.

Hess said forecast expenditure of around $2.2 billion in the Bakken was down from $3.1 billion last year due to lower well costs as a result of more cost-efficient pad-based drilling methods.

The company has earmarked $550 million for conventional exploration spending that will include shooting seismic and drilling exploration wells on the Dinarta and Shakrok blocks in Iraqi Kurdistan, where it holds 80% stakes as operator.

Hess has also allocated $1.6 billion for development projects, including Tubular Bells in the deep-water Gulf of Mexico and the North Malay Basin project in Malaysia.