Property, Plant and Equipment

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

3.  Property, Plant and Equipment

Capitalized Exploratory Well Costs:  

The following table discloses the net changes in capitalized exploratory well costs pending determination of proved reserves during the six months ended June 30, 2024 (in millions):

Balance at January 1, 2024	$	952
Additions to capitalized exploratory well costs pending the determination of proved reserves	102
Reclassifications to wells, facilities and equipment based on the determination of proved reserves	(117)
Capitalized exploratory well costs charged to expense	(48)
Balance at June 30, 2024	$	889

In the first six months, additions to capitalized exploratory well costs pending determination of proved reserves primarily related to wells drilled on the Stabroek Block (Hess 30%), offshore Guyana. Reclassifications to wells, facilities and equipment based on the determination of proved reserves resulted from the sanction of the Whiptail development project, the sixth sanctioned project on the Stabroek Block. At June 30, 2024, 33 exploration and appraisal wells on the Stabroek Block, with a total cost of $804 million, were capitalized pending determination of proved reserves. Capitalized exploratory well costs charged to expense in the first six months primarily relate to three exploration wells in the Malaysia/Thailand Joint Development Area (JDA) (Hess 50%) in the Gulf of Thailand. In the second quarter of 2024, the regulator provided notification that the current production sharing contract (PSC) for JDA Block A-18 will not be re-awarded to the existing PSC contractors upon its expiration in 2029. There is no plan to develop these discoveries prior to the expiration of the existing PSC. The preceding table excludes well costs of $15 million that were incurred and expensed during the first six months of 2024.

At June 30, 2024, exploratory well costs capitalized for greater than one year following completion of drilling of $702 million was comprised of the following:

Guyana: 92% of the capitalized well costs in excess of one year relate to successful exploration and appraisal wells where hydrocarbons were encountered on the Stabroek Block. The operator also plans further appraisal drilling on the block and is conducting pre-development planning for additional phases of development.

Suriname:  6% of the capitalized well costs in excess of one year relate to the Zanderij-1 well on Block 42 (Hess 33%). Exploration and appraisal activities are ongoing.

Malaysia:  2% of the capitalized well costs in excess of one year relate to the North Malay Basin (Hess 50%), offshore Peninsular Malaysia, where hydrocarbons were encountered in two successful exploration wells.  Pre-development studies are ongoing.