Premier Oil is set to start awarding FEED contracts related to the tension-leg platform (TLP) destined for its Sea Lion discovery in the South Atlantic before the end of next month.

As previously indicated in DI (see DI, 10 February 2014, page 1), TLP hull fabrication will take place in one of the usual crop of major yards in South Korea, China, Singapore or possibly even Japan, while topsides fabrication and integration has been previously suggested for sites in the U.S., Korea, Singapore, and Dubai, according a recent capital markets day presentation by Premier.

The TLP build scope comprises living quarters, utility drilling and process modules, a flare boom, as well as a support structure for survival craft.

Premier has identified possible TLP transport routes from the Far East and from sites along the U.S. Gulf of Mexico (GoM). Both hull and topsides are to be linked up off the coast of South America and will then continue traveling down south in a dry tow to the Falkland Islands.

The operator has signaled that it will award FEED contracts for the project before the end of the second quarter, with a shortlist of EPC bidders to be compiled by the fourth quarter, when Premier also hopes to have updated cost estimates available.

It is also expected to formalise project financing and a farm-down process before the end of this year, while the field development plan is also due to be finalised by the end of the year. EPC tenders are indicated for first-quarter 2015, with project sanction to follow in the second quarter of next year.

Earlier this year Premier indicated a total budget for Sea Lion phase one of U.S. $5.2 billion, and a surface facilities capex of $3.5 billion. Of that figure, $2.4 billion is suggested for the TLP alone, while subsea equipment and risers are expected to account for another $450 million. Project management and other costs add a further $650 million.

Drilling capex is estimated by Premier at $1.7 billion, while annual operating costs over 25 years are estimated at another $260 million per year—including the cost of renting a floating storage unit, and well intervention work.
With a 30% equity farm down—Premier currently holds 60% in Sea Lion—the operator could cut its share of development costs to $1.8 billion.

At the same time Premier has also talked about a second phase for Sea Lion, which will potentially tap other discoveries in the area such as Casper, Casper South and the southerly extent of the Sea Lion Field, via a single manifold tied back subsea to the TLP.

More detailed development studies are already underway and a new plan will incorporate future exploration—four new probes are due to be drilled off the Falklands by year-end 2015.

At Sea Lion Premier has indicated 1 Bbbl of prospective resources, with upside in Sea Lion’s west flank and at the Chatham prospect, while further “development changing” potential is indicated for the Zebedee and Jayne East prospects. Another large fan complex has been identified in the Elaine and Isobel prospect area, about 30 km (19 miles) south of the main Sea Lion fan complex .

Zebedee overlaps the main Sea Lion Field and it is itself overlapped by the Casper South prospect, and is estimated to contain gross prospective resources between 28 MMboe to 150 MMboe.

Jayne East, described as a high impact near field prospect, has gross prospective resources between 14 MMboe to 87 MMboe.

Isobel and Elaine might be "another Sea Lion," the operator suggested, with gross prospect reserves between 7 MMboe to 226 MMboe.

Sea Lion is located in license PL032 in the North Falklands Basin in a water depth of 450 m (1,476 ft), some 220 km (137 miles) north of the Falkland Islands. Casper, Casper South and Beverley are in PL004, while PL004b contains Zebedee, PL004c holds Jayne East and PL400a Isobel and Elaine.

Sea Lion was discovered with the 14/10-2 well and has so far been appraised with eight wells and two sidetracks. Oil is 28º API, with discovered in-place reserves put at 1.2 Bbbl to 1.4 Bbbl, with between 1.6 Tcf to 1.9 Tcf of gas.

Phase one involves 32 development wells—19 producers and 11 water injectors—and two subsea gas injection wells. Twelve wells will be predrilled and Premier predicts recovery of 293 MMbbl over 25 years—based on the assumption of a gas cap to the west of the field with up to 60 MMbbl of upside.

The TLP hull, with a displacement of 118,500 short tonnes and a hull weight of 28,400 tons, will be equipped to handle 120,000 bbl/d of oil and 165 MMcf/d of gas, based on the pre-FEED figures. Shell’s Mars B TLP recently installed in the GoM is seen as the nearest analogue to the proposed Sea Lion platform in terms of size and capacities.

Offshore