15 years within the making: Falkland Islands’ Sea Lion ready to switch forward to first oil

A final investment decision (FID) has been taken for a substantial oil project within the North Falkland Basin (NFB), where $1.8 billion will be wished to foot the bill to first oil and $2.1 billion to project completion. This FID comes 15 years after the brand new oil discovery became as soon as made.

The final investment decision for the Sea Lion oil project within the North Falkland Basin became as soon as bumped to 2025 final year following a cost hike to $1.4 billion for Phase 1. In conserving with Navitas’ partner, Rockhopper Exploration, its board has taken the FID for the come of Phase 1 of the field positioned to the north of the Falkland Islands and sanctioned the project.

The firm claims that Navitas Petroleum, because the operator, did the the same. As a prerequisite of taking the FID, the boards of each and each corporations contain celebrated the financing arrangements and signed the relevant documentation required to fund Phase 1 of the project. The financial shut is topic to a restricted preference of mature instances precedent, and Rockhopper expects this to happen over the coming weeks.

All approvals and is of the same opinion important at this stage were acquired, with the Falkland Islands’ authorities giving the fling-forward for the field constructing and production program for phases 1 & 2 of the Northern Trend Residence within the Sea Lion field. Following the approvals, the licenses retaining the project will switch into the exploitation phase, which lasts 35 years, or longer, if wished to full production.

Sam Changeable, Chief Govt Officer of Rockhopper Exploration, commented:“The sanctioning of Sea Lion is a serious milestone for Rockhopper and all its stakeholders and represents the discontinuance result of over twenty years of work.

“As soon as we first stumbled on Sea Lion in 2010, it became as soon as a vastly sharp play-opening correctly, and the chunky amount of work undertaken since then, first within the following drilling campaigns and then the a long time of engineering and industrial refinement, is now transferring against its final fruition as we switch into the come phase.”

Following finalization of work undertaken on each and each a technical and industrial degree to give a boost to the financing of the project, Rockhopper claims that the total publish-FID funding requirement is $1.8 billion to first oil and $2.1 billion to project completion, collectively with contingencies and financing charges. 

The firm elaborates that the project financing contains $1 billion of senior debt, of which $350 million is the firm’s debt, with the steadiness equipped by strategy of a mix of joint venture equity and publish first oil money flows.

Rockhopper advantages from previously disclosed financing loans from Navitas in relation to the project and, in consequence, the firm’s accumulate equity requirement is roughly $102 million, moreover the previously disclosed share of a 5% equity overun give a boost to which is spherical $10 million, with a full in mixture of $112 million.

The aptitude cost of the Sea Lion project proceeding is highlighted within the recent honest resource evaluate conducted by Netherland, Sewell & Buddies, Inc. (NSAI) on behalf of Rockhopper, which confirmed full harmful chunky field 2C resource of 917 mmbbls of which 321 mmbbls are attributable to the firm’s accumulate working curiosity.

Sea Lion will be developed in phases. As a result, Phase 1, which has been sanctioned, targets 170 mmbbls (59.5 mmbbls accumulate to Rockhopper) at a height production of roughly 50,000 bbls/d. The subsequent phases are expected to be self-financing the utilization of the excess money flows of Phase 1.

The first oil from Phase 1 is currently planned for 2028. Phase 2, which forms fragment of the the same FDP celebrated by the authorities, is anticipated to acquire better a extra harmful 2C resource of 149 mmbbls (52.15 mmbbls accumulate to Rockhopper). Currently, it’s miles anticipated that the main correctly may perhaps well no longer be drilled for over 365 days.

Navitas has entered into just a few business contracts which encompass, but are no longer restricted to, an FPSO charter settlement and related EPC and O&M contracts, alongside drilling rig contract, a framework settlement for the provision of drilling and completion services and products; and an settlement for the engineering, procurement, constructing, set up and commissioning of subsea umbilicals, risers, and flowlines (SURF).

As fragment of the FID route of, Rockhopper and the Falkland Islands’ authorities contain entered right into a final settlement settlement related to a previously disclosed disputed taxation amount on the farm out to Premier Oil in 2012, because the present affiliation became as soon as incompatible with attaining the FID at Sea Lion. The final settlement settlement will additionally resolve any tax liability in relation to the farm out to Navitas in 2022.

The recent affiliation states that the firm pays the tax liability in instalments, amounting to £30 million on an undiscounted basis. Navitas Petroleum, which sees Sea Lion as “the next expansive thing,” is the operator of the project with a 65% working curiosity whereas Rockhopper holds the final 35% stake. Subject cloth upside, collectively with Isobel-Elaine, a stumbled on oil field to the south of Sea Lion, became as soon as acknowledged and ought to nonetheless be developed below future phases.

Navitas Petroleum Trend and Manufacturing (NPDP), a subsidiary of Navitas Petroleum, has confirmed the final investment decision for the Sea Lion field constructing, which is anticipated to give a boost to valuable long-time period professional engineering, administration, manufacturing, and operations jobs across the UK provide chain over the next 30 years whereas benefiting the Falkland Islands economic system. 

The Sea Lion field has 319 million barrels of licensed resources, and the preliminary stage entails drilling 11 subsea wells tied motivate to a redeployed FPSO vessel. Phase 2 will add a extra 12 wells, expected within three years of first oil. NPDP will delivery an jam of business in Aberdeen in early 2026 to work alongside side its London and Stanley groups to bring Phase 1 of the come.

Ian Ramsay, NPDP Chief Operating Officer (COO), underscored: “The UK and Falkland Islands’ provide chain has already efficiently delivered 29 exploration and appraisal wells within the gap. The constructing will be improved to industry and regulatory requirements and develop jobs each and each within the UK and the Falklands.

“We will be accountable and respectful custodians of the Sea Lion field one day of its lifetime. The aptitude to enhance the economic system of the Falklands and responsibly delivery up a brand recent production basin is an more than just a few that offers us all with immense motivation.”