Hess Corp’s shares swooned the most in almost three years, wiping out US$1.5 billion in market valuation, after work at the oil explorer’s most promising overseas investment was halted by a Venezuelan blockade, Bloomberg reported yesterday.
The report said that the intervention threatened to derail development of the 5 billion-barrel discovery off Guyana’s coastline that is critical to Hess’s future growth plans that it receives top billing in the New York-based driller’s investor presentations. Although significant for partners Exxon Mobil Corp. and CNOOC Ltd., Bloomberg said that Hess is particularly dependent on the Guyanese project to generate production growth and cash flow into the next decade.
Venezuela, which has a border controversy with Guyana, “aggressively” interrupted the Exxon-led effort to map the sea floor on Dec. 22, U.S. State Department Deputy Spokesman Robert Palladino said on Sunday. By early Monday, the Venezuelan vessels had withdrawn, according to Bard Stenberg, a spokesman for vessel owner Petroleum Geo-Services ASA.
