Premier Oil’s Sea Lion project is on the path to being sanctioned next year following substantial progress, with first oil targeted in 2021, according to partner Rockhopper Exploration.
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Sea Lion schematic Phase 1, 2, and 3. Image from Rockhopper. |
“In the Falklands we are extremely encouraged by the progress made in securing the funding for Sea Lion where we continue to work very closely with Premier to progress the project to sanction in 2018,” says Sam Moody, Rockhopper CEO.
According to Rockhopper, Sea Lion Phase 1’s front-end engineering and design (FEED) process has substantially progressed and de-risked the Sea Lion development with focus in 2017 continuing on the commercial, fiscal and financing elements of the project. FEED for Sea Lion began in January 2016.
“A number of contractors have now expressed interest in potentially providing funding for the project and the company is hopeful of reaching agreement in principle on key terms over the coming months with a view to being in a position to sanction the project during 2018,” says Rockhopper.
The company says that discussions are also progressing with potential providers of export credit finance to the project.
Sea Lion is 200km north of the Falkland Islands, and sits in 450m water depth, on the eastern edge of the North Falkland Basin.
In August 2016, Premier reduced development costs to US$1.5 billion, equivalent to $7/bbl, or $45/bbl breakeven project cost. However, further cost reductions are expected, given the current market environment.
In May 2016, an independent reserves report estimated the Falklands Greater Sea Lion Complex to contain more than 500 MMbbl of 2C or contingent resources. When gas is added to the total, Premier Oil said that the estimate increases to 747 MMboe.
In the Phase 1 development, field peak production is expected to reach about 75,000 b/d.
SBM Offshore will provide the FEED for the floating production storage and offloading (FPSO)vessel, with work anticipated to take 15-18 months to complete.
The FEED contract for SURF transport and installation was signed with Subsea7, for flexibles with National Oilwell Varco and for the subsea production system with One Subsea
The Falkland Islands Government (FIG) has agreed to extend the license for the Sea Lion Discovery Area in PL032 to 2020.
A draft Field Development Plan (FDP) has been prepared and submitted to FIG, says Rockhopper.
Read more:
Sea Lion complex contains 500 MMbbl plus
Premier inks first major Sea Lion contract, expands scope
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