A hydrocarbon development project in the Falkland Islands faces new challenges following the announcement of one of the companies involved that it shall be lifting all South Atlantic operations.
FIG authorities have expressed concern over press reports regarding oil companies Harbor Energy and Rockhopper Exploration whereby the former would intend to withdraw from the Sea Lion hydrocarbon development project in the northern basin of Falklands, following a review of its strategic objectives.
Harbor Energy's decision follows the suspension of pre-development work in 2020 due to the prevailing conditions and impact of the COVID-19 pandemic.
Harbor Energy was formed last April through the merger of Premier Oil and Chrysaor Holdings and in its mid-year balance sheet as of June 30, which has been released this week states that Sea Lion does not fit into its strategic agenda, and is therefore looking to get rid of it as well as of other oil licenses it has in the Falkland Islands.
The Falklands Islands Government has nevertheless noted that Rockhopper does intend to go ahead with the development of the Sea Lion project.
This represents a very difficult time for Rockhopper, but also a great opportunity, Rockhopper CEO Sam Moody said. While we are disappointed that Harbor has decided not to go ahead with Sea Lion, we remain committed to the development of this project.
Rockhopper has been in talks with the Israeli oil company Navitas Petroleum, which in early 2020 reached a pre-agreement to take over 30% of Sea Lion. This understanding was later extended until the end of September, it was reported.
Navitas has recently received a capital injection in the order of US $ 900 million and joined the deepwater Shenandoah project, in the Gulf of Mexico, Rockhopper pointed out.
Moody took the opportunity to comment that Navitas' participation in the Gulf of Mexico was a good sign, demonstrating the appetite of independent oil exploration and production companies to invest in deepwater projects, and that there are funds in the capital market for that purpose. We look forward to working with them on the development of Sea Lion, he stressed.
Rockhooper also vowed to work with Harbor and FIG to ensure an orderly exit of the company from the Islands.