Hess Exits Suriname's Offshore Block 59 Amid Drilling Risks

Hess Corporation (HES) has officially exited Suriname’s offshore Block 59, marking the end of its exploration activities in the area after previously fulfilling its minimum work obligations, per a Reuters report. The announcement came from Staatsolie, Suriname’s state oil company, stated that the block would now revert to state control.

The decision came more than a year after Hess’ former partners, Exxon Mobil Corporation XOM and Equinor ASA EQNR, withdrew from the block due to high drilling risks. The consortium had conducted seismic studies but concluded that the technical and financial uncertainties were too great to justify further investment.

Block 59 Struggles to Attract Long-Term Interest

Block 59 lies in deepwater terrain, with sea depths of 2,700-3,500 meters in the far north-western marine area of Suriname. Despite the promising geophysical data collected, no follow-up drilling was undertaken after ExxonMobil and Equinor exited. Hess, left as the sole stakeholder, was unable to attract new partners willing to shoulder the exploration risks.

By opting out before the next phase of the exploration period, which was set to end in July 2025, Hess avoids further financial commitments in a region that is yet to yield viable production prospects despite recent regional discoveries.

Staatsolie Eyes New Partnerships

According to Staatsolie, nearly half of Suriname’s offshore territory is currently under production sharing agreements with international oil and gas firms. With Block 59 now back under its purview, the national oil company aims to reassign the acreage as part of its broader strategy to maximize offshore investment.

Staatsolie reiterated its commitment to securing new partnerships to tap into the country’s hydrocarbon potential, although Block 59's history underscores the significant challenges of exploration in ultra-deepwater environments.

Zacks Rank & Key Picks

Currently, HES, XOM and EQNR carry a Zacks Rank #3 (Hold) each.

Investors interested in the energy sector may look at a better-ranked stock like TechnipFMC plc (FTI), which carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

TechnipFMC continues to build momentum in its subsea business, supported by strong order activity and a growing pipeline of opportunities. A key strength in FTI’s business model is its limited exposure to U.S. land operations, which are more sensitive to volatile commodity pricing.

The Zacks Consensus Estimate for FTI’s 2025 EPS is pegged at $2.08. The company has a Value Score of B. 

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This article originally published on Zacks Investment Research (zacks.com).

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