MercoPress. South Atlantic News Agency

Falklands: Contractual dispute with rig company raises speculation over drilling program

Luxton confirmed that FIG “will not permit anything less than full and proper abandonment of exploration wells drilled by any operator in Falklands”

The Falkland Islands government would not permit anything less than full and proper abandonment of exploration wells drilled by any operator in the Falkland Islands, stated Director of Mineral Resources Stephen Luxton this week, following news of a contractual dispute between Premier Oil and Ocean Rig over the drilling rig Eirik Raude.

 Ocean Rig, owners of the Eirik Raude currently being used by Premier Oil in the Falklands, was on January 31, served a notice of breach of material obligations from Premier Oil under the drilling contract for the Eirik Raude semi-submersible drilling rig.

This created speculation in the oil industry press that Premier might wish to end the contract prematurely.

Penguin News contacted Premier Oil in the Falklands but it was confirmed that due to it being a private contractual dispute a statement would not be released.

A spokesperson did tell Offshore Energy Today however that, “at present there has been no changes to Premier’s drilling program”.

In a statement to the Falklands’ press Mr. Luxton said: “FIG is not involved in the contractual dispute that has been announced between the operator and the rig contractor. I am afraid I’m not at liberty to comment on commercial matters or speculate on any potential implications.

“I can confirm that FIG will not permit anything less than full and proper abandonment of exploration wells drilled by any operator in the Falkland Islands.

“This must be carried out to the current recognized North Sea standard for permanent abandonment as set out in the Oil & Gas UK Guidelines for the Abandonment of Wells. All wells drilled in the 2015/16 campaign must be left in a condition that is compliant with both Falkland Islands legislation and this guidance, prior to the rig departing the Falkland Islands.

The current contractual matter has no bearing whatsoever on the application – or delivery – of a robust well abandonment program.

“I am pleased to say that in practice, operators in the Falkland Islands have adopted a very robust and conservative approach to well abandonment design which has generally considerably exceeded the minimum required standard.

All pre-drill well designs and well abandonment plans are reviewed by FIG and by professional well inspectors from the Health & Safety Executive who are contracted to provide offshore safety expertise.” (Penguin News).-