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Property, Plant and Equipment
12 Months Ended
Dec. 31, 2019
Property Plant And Equipment [Abstract]  
Property, Plant and Equipment

5.  Property, Plant and Equipment

Property, plant and equipment at December 31 were as follows:

 

 

2019

 

 

2018

 

 

 

(In millions)

 

Exploration and Production

 

 

 

 

 

 

 

 

Unproved properties

 

$

168

 

 

$

394

 

Proved properties

 

 

3,304

 

 

 

3,124

 

Wells, equipment and related facilities

 

 

28,404

 

 

 

26,173

 

 

 

 

31,876

 

 

 

29,691

 

Midstream

 

 

3,904

 

 

 

3,492

 

Corporate and Other

 

 

40

 

 

 

39

 

Total — at cost

 

 

35,820

 

 

 

33,222

 

Less: Reserves for depreciation, depletion, amortization and lease impairment

 

 

19,006

 

 

 

17,139

 

Property, Plant and Equipment — Net

 

$

16,814

 

 

$

16,083

 

Capitalized Exploratory Well Costs:  The following table discloses the amount of capitalized exploratory well costs pending determination of proved reserves at December 31, and the changes therein during the respective years:

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In millions)

 

Balance at January 1

 

$

418

 

 

$

304

 

 

$

597

 

Additions to capitalized exploratory well costs pending the determination of proved reserves

 

 

224

 

 

 

128

 

 

 

116

 

Reclassifications to wells, facilities and equipment based on the determination of proved reserves

 

 

(58

)

 

 

 

 

 

(165

)

Capitalized exploratory well costs charged to expense

 

 

 

 

 

(14

)

 

 

(268

)

Dispositions and other

 

 

 

 

 

 

 

 

24

 

Balance at December 31

 

$

584

 

 

$

418

 

 

$

304

 

Number of Wells at December 31

 

 

31

 

 

 

24

 

 

 

12

 

During the three years ended December 31, 2019, additions to capitalized exploratory well costs primarily related to drilling at the Stabroek Block, offshore Guyana.  Other drilling activity included the Esox prospect in the Gulf of Mexico during 2019 and the Bunga prospect in Malaysia during 2018.  Reclassifications to wells, facilities and equipment based on the determination of proved reserves in 2019 primarily related to the Stabroek Block, offshore Guyana, where the Liza Phase 2 development was sanctioned and the Esox discovery.  In 2017, the Liza Phase 1 development was sanctioned.

 

Capitalized exploratory well costs included in the table above that were charged to expense include the following:

2018:  In Canada, offshore Nova Scotia (Hess 50% participating interest), the operator, BP Canada, completed drilling of the Aspy exploration well, which did not encounter commercial quantities of hydrocarbons.  As a result, we expensed well costs totaling $120 million of which $106 million was incurred and expensed in 2018.

2017:  In Ghana, at the Hess operated offshore Deepwater Tano/Cape Three Points license (Hess 50% license interest), management determined in the fourth quarter of 2017 that we would not develop the previously discovered fields.  As a result, we recorded a charge of $268 million to write-off previously capitalized exploration wells.

The preceding table excludes well costs incurred and expensed during 2019 of $49 million (2018: $151 million; 2017: $0 million).

Exploratory well costs capitalized for greater than one year following completion of drilling were $400 million at December 31, 2019, separated by year of completion as follows (in millions):

2018

 

$

157

 

2017

 

 

73

 

2016

 

 

 

2015

 

 

166

 

2014 and prior

 

 

4

 

 

 

$

400

 

Guyana:  Approximately 50% of the capitalized well costs in excess of one year relates to ten successful exploration wells where hydrocarbons were encountered on the Stabroek Block, offshore Guyana.  The operator plans further appraisal drilling for certain fields and is conducting pre-development planning for additional phases of development beyond the two existing sanctioned phases of development.

Gulf of Mexico: Approximately 30% of the capitalized well costs in excess of one year relates to the appraisal of the northern portion of the Shenzi Field (Hess 28%) in the Gulf of Mexico, where hydrocarbons were encountered in the fourth quarter of 2015.  Following exploration and appraisal drilling activities completed by the operator in prior years on adjacent blocks to the north of our Shenzi blocks, the operator commenced acquiring 3D seismic in 2019 for use in ongoing appraisal and development planning of the northern portion of the Shenzi Field.

JDA:  Approximately 10% of the capitalized well costs in excess of one year relates to the JDA in the Gulf of Thailand (Hess 50%) where hydrocarbons were encountered in three successful exploration wells drilled in the western part of Block A-18.  The operator has submitted a development plan concept to the regulator to facilitate ongoing commercial negotiations for an extension of the existing gas sales contract to include development of the western part of the Block.

Malaysia:  Approximately 10% of the capitalized well costs in excess of one year relates to North Malay Basin, offshore Peninsular Malaysia (Hess 50%), where hydrocarbons were encountered in five successful exploration wells.  We are continuing with pre-development planning for future phases of field development.