MercoPress. South Atlantic News Agency

Falklands' exploratory campaign ended, following termination of ocean rig contract

The rig 'Eirik Rude' experienced a number of material operational issues, according to Premier Oil and Noble Energy

The Falkland Islands government and Premier Oil have announced on Friday the ocean rig 'Eirik Raude' contract termination, which in practical terms puts an end to the current exploratory campaign and the scheduled drilling of the Chatham well. Nevertheless both sides underlined the success of the now terminated campaign with the oil discoveries at the Zebedee and Isobel Deep prospects in the North Falkland basin and look forward to continue working in the near future.

In a release from Stanley, ”the Falkland Islands Government notes today’s (Friday) press release by Premier Oil stating that the contract it holds with Ocean Rig UDW for drilling operations has been terminated due to operational issues.

“Despite the early conclusion to drilling operations, the exploration campaign over the last eleven months has resulted in the operators declaring an oil discovery at the Zebedee prospect in April 2015, closely followed by a second oil discovery at the Isobel Deep prospect in May 2015. Subsequently, the re-drill well 14/20-2 on the Isobel prospect confirmed the Isobel area as a potentially significant discovery that could form a later phase of development in the North Falkland Basin.

Director of Mineral Resources, Stephen Luxton, commented that ”while the last year has not been without some operational challenges, the ultimate goal of the exploratory drilling program is to prove additional and potentially commercial oil resources, and in this respect it has undoubtedly been a success. The drilling results achieved since March 2015 validate our long standing confidence in the prospectivity of the Falkland Islands offshore area.”

“Following completion of all permanent well abandonment and seabed clearance operations, it is anticipated that a campaign demobilization program will commence, lasting for several weeks”.

On Friday, Premier Oil posted the following release announcing the termination of the drilling contract.

”Premier and Noble Energy entered into a contract with Ocean Rig UDW (“Ocean Rig”) on 3 June 2014, for the provision of the Eirik Raude drilling unit for an exploration drilling campaign in the Falkland Islands.

“Following a number of material operational issues with the Eirik Raude rig during the term of the contract to date, Premier and Noble Energy issued a termination notice to Ocean Rig on 11 February 2016, terminating the contract with immediate effect. As a result, Premier will no longer be drilling the Chatham exploration well during the current campaign. However, we are in discussions with the Falkland Islands Government regarding the possibility of drilling this prospect in the future”.