HOUSTON, Jan 7 - Hess CEO John Hess on Tuesday

said he sees the oil market as closer to being balanced than

oversupplied this year, despite worries about demand from China

and greater production from U.S. and non-OPEC producers.

He offered an optimistic view of the shale oil market and

the oil producer's own prospects in Guyana in remarks to

investors at the Goldman Sachs Energy, CleanTech and Utilities

Conference in Miami. Hess cautioned the market could be volatile

this year, citing political risks with Iran and Venezuela.

"Demand is a little more robust than people thought," said

Hess, adding that analysts were looking at projected inventory

builds of a million barrels per day, which has been cut by

half.

Hess also said the company's future in Guyana has a long way

to go with production on the discoveries to date still early. He

said the Guyana joint venture with Exxon Mobil ( XOM ) and CNOOC plans

to add two more vessels in 2026 and 2027, bringing the total to

six vessels. Even then, those six will only tap five of the 11

billion barrels of oil equivalent that have been discovered so

far, Hess said.

Investors can expect to see more efficiency in shale oil

drilling, which will offset the fact that shale, other than the

Permian Basin oilfield, is now a mature 20-year-old industry,

Hess said.

Hess is producing 200,000 barrels per day in shale, which

will "run for the next 10 years at that kind of rate," he said.

Chevron's ( CVX ) $53 billion deal to acquire Hess has been stalled by a

contract arbitration challenge by Exxon Mobil ( XOM ) and CNOOC

, Hess's partners in a Guyana oil joint venture, who

claim a right of first refusal to any sale of Hess's Guyana

assets.

Hess said on Tuesday that he expects a decision in the

arbitration case by late August or September.

"We're very confident that the merger is going to go through

and we're getting prepared for that," Hess said.