Premier Oil has lifted its full-year production guidance as well as estimated resources at a huge oilfield it discovered off the coast of Mexico. Premier Oil, the operations of which stretch from Indonesia to the Falkland Islands, now expects 2017 production in the range of 75,000-80,000 barrels of oil equivalent per day (boepd), up from the previous forecast of 75,000 boepd, thanks to its strongly performing North Sea fields.
The oil producer, turning a corner after concluding a refinancing deal to survive the oil market downturn, also upgraded its oil-in-place estimates at the Mexican Zama field to 1.2-1.8 billion barrels, compared with a less specific previous forecast of more than 1 billion barrels.
Premier Oil's cash flow from operations rose to US$ 292 million in the first half of the year, up from US$109 million a year earlier, while net debt has fallen to US$ 2.74 billion from US$ 2.77 billion at the end of 2016.
After taking a strong financial blow from the oil downturn that coincided with hefty spending commitments on new fields, Premier Oil is now working on further reducing debt, to be accelerated by the start-up of its North Sea Catcher field by the end of the year.
The discovery of the Zama field, which Wood Mackenzie analysts called one of the twenty largest shallow-water finds in two decades, has provided further momentum for the company.
Initial scoping estimates are that Zama has very low breakeven, perhaps as low as US$ 28 a barrel. It looks like a world-class asset that will fit well into our portfolio, Premier's chief executive, Tony Durrant said.
The oil producer, which last year bought E.On's North Sea assets for US$120 million, has also reduced development costs at its Tolmount gas field in the North Sea by US$175 million through the sale of its stake in the infrastructure part of the project.
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!
-To go to court requires agreement between the two countries and for this must be established negotiations, something that the UK refuses to do because it knows how difficult its position.Aug 30th, 2017 - 07:41 pm +8
There’s absolutely nothing stopping Argentina filing a lawsuit. It doesn’t need the UK’s prior agreement to do that
From ICJ website:
d) Forum prorogatum
If a State has not recognized the jurisdiction of the Court at the time when an application instituting proceedings is filed against it, that State has the possibility of accepting such jurisdiction subsequently to enable the Court to entertain the case: the Court thus has jurisdiction as of the date of acceptance by virtue of the rule of forum prorogatum.
-The extension of the continental shelf approved by the UN is very important because:
Argentina extends its territorial sovereignty over the sea.
No, jurisdiction over the sea has not been extended anywhere on Earth. That remains at a maximum possible of 200 nmi. The extension applies to the continental shelf. The waters above that extension remain international waters. In Argentina’s case the extension only covers the shelf corresponding to Argentina, not to any other territory.
-It confirms the existence of a territorial dispute in the area.
The Commission’s remit is the continental shelf, nothing else, so at most it has power to recognise disputes over the continental shelf.
-“Neither Britain nor Argentina can separately gain any internationally recognised rights to exploit the resources of the continental shelf, in the south-west Atlantic, so long as the dispute continues.”
So what is Premier Oil doing here?
Again, thank you
Premier Oil is not a State owned company. It is a shareholder owned company. And it’s licensed by the FI Government, not the UK government. Nothing forbids the FI to exploit its own resources.
Demon TreeAug 30th, 2017 - 11:28 pm +7
No. they claimed it all in 1946, and they claim it all today. If recognition is a gain, then its one that's not worth a brass farthing. Outside of the areas claimed for the Falklands, nobody was contesting Argentina's claims. All that has changed is that the UN is prepared to recognise it. There was nothing to stop argentina exploiting those areas anyway.
The FIG have issued licences for its claimed EEZ. The Argentines have issued licences for its claimed EEZ, but no longer for the area claimed by the UK (they tried once I believe, but there were no takers).
As for the Falklands extended area, I am not aware of any limitations placed upon the licensing process.
M1833Aug 29th, 2017 - 03:52 pm +6
If there is 'a genuine dispute' the case must go to court. As mentioned, Argentina threatened court action in 2010 - why is it taking so long.
Again, territorial waters are linked to sovereignty. If Argentina has a genuine sovereignty claim name one piece of international law that supports her claim?