Oil and gas company Rockhopper Exploration on Thursday affirmed its intention to press ahead with the development of the Sea Lion offshore oil field in the Falkland Islands, a week after its partner decided to pull out.
Rockhopper Exploration is set to regain a 100% stake in the offshore oil and gas field shortly, after its operating partner Harbour Energy said it would pull out from the project as “development of the project is not deemed a strategic fit for Harbour.“
Rockhopper discovered the oil field in 2010, but more than a decade since the discovery, the field has yet to produce a single barrel of oil.
In 2014, Rockhopper's partner Premier Oil (now part of Harbour) and Rockhopper targeted first oil for 2019; however, years later, the field development has yet to reach a final investment decision.
The Sea Lion project is estimated to hold 2C resources in excess of 500 million barrels.
Premier Oil and Rockhopper have previously said that the Sea Lion would be developed in phases, with the first phase developing 250 million barrels (mmbbls) of resources in PL032 using a conventional floating production, storage, and offloading unit (FPSO) based scheme.
When Harbour Energy last week said it would leave the project, Rockhopper said it was both a difficult moment by also a huge opportunity for Rockhopper, as the company will gain greater control through its expected regaining of operatorship and full ownership.
It on Thursday confirmed it would continue to pursue the development of the Sea Lion project with a handover process with Harbour Energy to start shortly.
As for the means of development of the oil field, Rockhopper said that work had already started on an alternative, lower-cost development scheme “utilizing the existing extensive design and engineering work undertaken for the project in recent years.”
Also, Rockhopper said that due to the unique characteristics and challenges of progressing an oil field development in the Falklands, "an innovative approach to funding will likely be required." It did not share further details on this.
The company is also still in discussions with Navitas Petroleum around its potential entry into the Sea Lion project.
"In August this year, Navitas and partners raised project financing in excess of US$900 million and have taken final investment decision on the 330 million barrel deep water Shenandoah project in the US Gulf of Mexico, demonstrating their ability to raise capital for large-scale offshore oil developments,” Rockhopper said, adding it had has started discussions with Harbour and the Falkland Islands Government ("FIG") to ensure an orderly exit by Harbour from the Falkland Islands.
Sea Lion is a world-class oil field with the scale and potential to create very material value for Rockhopper, its partners and the Falkland Islands as a whole, the company said.