A decision is expected imminently from operator Premier Oil on whether an FPSO or TLP is preferred for its frontier Sea Lion development offshore the Falkland Islands in the south Atlantic.

DI understands that, although an FPSO (Floating Production, Storage and Offloading) vessel has been the preferred development option for some time, the TLP (Tension Leg Platform) alternative along with an accompanying Floating Storage and Offloading (FSO) vessel is becoming increasingly attractive to Premier and its partners (see DI, 2 September 2013, page 1).

Although Premier itself admits that for an FPSO there are “no showstoppers” and that the solution is viable, it is studying a TLP with an integral drilling rig as an alternative to reduce the forecast drilling and subsea costs, give greater flexibility for infill drilling, and mitigate flow assurance risks. It also adds that the alternative has better motion characteristics, and that “initial cost estimates appear attractive”.

A final facility decision is expected by early in the new year, with a targeted sanction date of late 2014, with a time scale until first oil of up to four years. The Sea Lion field sits in a water depth of 450 m (1,476 ft).

Partner Rockhopper Exploration’s CEO, Dr Pierre Jungels, said in the company’s latest results presentation that the development of Sea Lion “continues apace and the imminent conclusion of the feasibility work around the TLP solution means that we will soon be in a position to compare it to the work already done on the FPSO alternative and decide on the preferred concept”.

DI hears that the operator Premier wants to push ahead with the concept process and proceed with Front End Engineering and Design (FEED) work by the first quarter of 2014. Although an FPSO solution has already been confirmed as commercially viable by the operator, a TLP is believed to offer both operational and cost advantages over the rival FPSO alternative.

It’s a close-run thing, apparently, with completion of the concept selection phase of the project having already been delayed to allow time for the completion of the work on the development options.

Sea Lion itself remains a field with good economics, either way. According to Rockhopper, the latest modelling has led the joint venture to increase the estimate of the field’s 2C resources from 321 MMbbl to 337 MMbbl, with a further 57 MMbbl contributed by satellites. “Moreover, this figure assumes a gas cap is present on the western flank of the field. If that is not the case, the 2C estimate for Sea Lion could rise by a further 65 MMbbl to 402 MMbbl,” said.

Rockhopper in its latest statement. “We believe the chance of a gas cap being present is approximately 50% and only drilling can resolve the question,” it added.

A contract for a drilling unit to begin the planned exploration campaign in late 2014 or early 2015 is also expected to be signed early in 2014. There are four wells that could be drilled in the next campaign, said Rockhopper. In addition to the Isobel/Elaine and Jayne East prospects, the Zebedee and Chatham prospects in PL004b (Rockhopper 24%) and PL032 (Rockhopper 40%) respectively are also pencilled in for drilling. The exploration upside from these prospects is put at up to nearly 800 MMbbl of oil in place.

The initial field development would take place in the north of the block, with up to 30 development wells to be drilled to achieve initial production rates of up to 100,000 boe/d. This would be followed by a second phase of development of the southern sector, accessing up to 110 MMbbl via 22 wells, after incorporating results from exploration and appraisal wells in the south.

Total development Capex (gross) for Sea Lion has previously been estimated at up to US $5 billion by Rockhopper, although this figure is expected to be reduced as part of the ongoing study process.

Premier became the operator of all the licence interests in the North Falklands Basin formerly operated by Rockhopper in November last year after a $1 billion farm-in, taking a 60% stake.

Offshore