Hess Corporation (HES) Q2 2023 Earnings Call Transcript

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen and welcome to the Second Quarter 2023 Hess Corporation Conference Call. My name is Kevin and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to Jay Wilson, Vice President of Investor Relations. Please proceed.

Jay Wilson

Thank you, Kevin. Good morning, everyone and thank you for participating in our second quarter earnings conference call. Our earnings release was issued this morning and appears on our website, www.hess.com.

Today's conference call contains projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements. These risks include those set forth in the Risk Factors section of Hess's annual and quarterly reports filed with the SEC. Also, on today's conference call, we may discuss certain non-GAAP financial measures. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures can be found in the supplemental information provided on our website. On the line with me today are John Hess, Chief Executive Officer; Greg Hill, Chief Operating Officer; and John Rielly, Chief Financial Officer.

I'll now turn the call over to John Hess.

John Hess

Thank you, Jay. Welcome, everyone, to our second quarter conference call. Today, I will share some thoughts on the energy transition and then discuss our continued progress in executing our strategy. Then Greg Hill will cover our operations and John Rielly will review our financial results.

First, in terms of the energy transition, it is important to realize that progress has been made towards the goal of the Paris Agreement. According to the International Energy Agency, or the IEA, the global median temperature increase prior to the Paris Agreement was 3.5 degrees Celsius. Today, according to the IEA's stated policy scenario, the world is on a trajectory to a median temperature increase of 2.5 degrees. However, much more progress is required and we currently are not on a path to meeting the Paris Agreement's goal of 1.5 degrees.

There are 3 important gaps affecting the pace of progress. First, the world is facing a structural deficit in energy supply and the key challenge is investment. To meet growing energy demand, the world needs to invest $4 trillion each year for the next 10 years in clean energies, significantly more than last year's investment of $1.4 trillion. The world also needs to invest $500 billion each year for the next 10 years in oil and gas, as compared with $300 billion to $400 billion invested annually in the last 5 years.