Premier Oil has extended the scope of its Sea Lion Phase 1a (SEN, 32/17) FPSO development in the Falkland Islands to cover the far northwest of the Sea Lion Field.
It is now envisaged that the scheme will utilise 18 wells to recover 220 MMbbl of oil during a 20-year period (a 37% increase on the 160 MMbbl previously announced).
Peak production at the field will increase from about 60,000 bbl/d to 85,000 bbl/d.
Premier said that despite the increase in scope, the estimate of capex to achieve first oil remains at $1.8 billion, reflecting significant cost reductions in the current market, and total expected development capex per barrel has reduced from $14/bbl to $11/bbl.
Premier said, “The technical and cost improvements and efficiencies identified during pre-FEED, have resulted in a lower breakeven oil price for the project and significantly improved the overall project economics.
“The designs of both the FPSO and the Subsea System have evolved, tendering exercises have been completed and contractors are being selected for the provision of these facilities.”
Premier has tasked SBM Offshore with carrying out the 18-month FEED for the FPSO vessel and the subsequent provision of the FPSO unit on a lease and operate basis.
SBM, which will deliver a converted FPSO unit for the project, said the subsequent phases to develop Sea Lion and the wider North Falkland Basin reserves also are expected to use FPSO units.
Contractors also are close to being selected to provide the subsea system and are expected to be awarded before the end of the first quarter.
A draft field development plan has been submitted to the Falkland Islands Government (FIG) for comment. An application also has been made to the FIG to extend the licence for the Sea Lion discovery area in PL032.
In more good news for the region, Premier Oil also said that the Isobel Deep re-drill (well 14/20-2) has successfully confirmed the oil discovery encountered in the original Isobel Deep well. This re-drill also has discovered new hydrocarbons in additional sandstones.
Further evaluation will now be required to calibrate the well with the existing 3-D seismic to determine future plans and the extent of the discovered resource.
Sam Moody, CEO of partner Rockhopper, said, “The huge improvements to the project, combined with the award of the FPSO FEED and finalisation of the commercial terms with Premier allows us to keep moving the Sea Lion project towards a sanction point in mid-2017 despite the low oil price environment.
“The recent discoveries in the Isobel Elaine complex could open a third area of development in the basin and this on top of the already proven resources of Phase 2 should have a very significant impact on the life of field opex costs for Phase 1a.”
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