Sea lion ready to roar as ‘next big thing’ once Falkland Islands gives the all-clear

Israel’s Navitas Petroleum has confirmed that its giant Sea Lion oil project is ready for a final investment decision (FID), which is still anticipated during 2024 for Phase 1, thus, the firm is working to put a financial package in place for the development while it awaits the Falkland Islands’ green light for the project’s environmental impact statement (EIS).

Following overhaul to align with static and dynamic reservoir models, the project’s field development plan (FDP) was updated to include an initial development stage targeting 312 mmbbls, up from 269 mmbbls, with the certified gross 2C resources in the overall North Falkland Basin (NFB) getting boosted from 712 mmbbls to 791 mmbbls. The FDP for the project the Israeli player has described as “the next big thing” has been sent for approval.

Navitas Petroleum has submitted an environmental impact statement to the Falkland Islands government concerning proposals to drill oil wells and start offshore production from the Sea Lion field northern development area, entailing Phase 1 and 2, and associated activities. This has kicked off a statutory period of consultation, which will now run from July 2, 2024, to August 13, 2024.

Located approximately 220 km to the north of the Falkland Islands in Block 14 / 10, the field in the production license areas PL032 and PL004b encompasses the proposed Phase 1 and 2 development, which is expected to consist of 23 completed wells, comprising 16 oil production wells, six water injection wells, and a remote gas injection well, drilled by a mobile offshore drilling unit (MODU) over six drill centers.

Previously, 20 exploration and appraisal wells were drilled at the Sea Lion field with past investments amounting to approximately $1.3 billion. This is the first potentially commercially viable hydrocarbon discovery in the NFB, which was discovered by Rockhopper Exploration in 2010. With a projected field life of 30 years, it is estimated that phases 1 and 2 can recover around 306.9 million stock tank barrels (mmstb) of oil during that time.

After Harbour Energy decided to exit the Sea Lion project in September 2021, Rockhopper, Harbour, and Navitas signed a detailed heads of terms deal in December 2021 to allow a clean exit for Harbour and a farm-in for Navitas. Afterward, the three players signed legally binding definitive documentation in April 2022 concerning Harbour exiting and Navitas entering the NFB.

Furthermore, a floating, production, storage, and offload (FPSO) vessel, anchored to the seabed, within a 1,275 m radius exclusion zone, will be used to produce the fluids from the wells. The oil production and water injection well drill centers are anticipated to be within a 2 – 5.5 km radius around the FPSO, with the remote gas injection well being about 8 km from the FPSO.

Following the first oil, two periods of simultaneous operations (SIMOPS) are expected as the FPSO begins with production from the first tranche of wells and the MODU continues to drill the remaining wells with installation of subsea equipment taking place.

While drilling is expected to start 17-20 months from project sanction, the first oil is anticipated about 33 months from the FID. Navitas and its partner, Rockhopper Exploration (35% working interest), are targeting a final investment decision this year.

Sea Lion’s estimated capex to first oil is $1.2 billion with peak production at 55,000b/d, which could eventually be ramped up to 80,000b/d if a bigger FPSO replaces the original one. The Phase 1 development will consist of 11 wells.