Falkland Islands O&G Exploration

Rockhopper Exploration discovered up to 1.4 billion barrels boe in its Sea Lion prospect in the North Falkland Basin during the spring of 2011. In 2012 disappointment set in with many dry wells and only Borders & Southern Petroleum finding an estimated 190 million barrels of condensates in the South Falkland Basin. In 2013 exploration was basically halted while seimic surveys continued. There were two 3D seismic campaigns in the South Falkland Basin and the start of a third. 2013 also saw FOGL and Desire Petroleum plc merge, which has resulting in a larger company with a budget of $275 million for exploration.

The major focus in 2014 will be on the Sea Lion discovery in the North Falkland Basin. According to operator Premier Oil plc and partner Rockhopper Exploration plc., the field is believed to hold 394 million barrels of oil equivalent that can be recovered. Once developed it is expected to reach a gross production plateau rate of between 80,000 and 85,000 barrels per day, although first oil is unlikely to be achieved until late 2018 at the earliest. Premier holds a 60% interest in the PL032 license, which contains the majority of the Sea Lion discovery, after it farmed into the field in October 2012. Rockhopper has a 40% share. Premier and Rockhopper are not the only companies keeping a close eye on the Sea Lion project. This is because the field extends south into the PL04b license, in which Falkland Oil & Gas holds a 40% stake along with Rockhopper (24%) and Premier (36%). Estimates for the PL04b license range from 71 million barrels to 218 million barrels.

The Argentinian government, which still claims the islands belong to Argentina, have demanded that exploration stops and have sent warnings to the effect that they will seize ships that partake in the exploration efforts, including cargo ships, that enter its ports. In truth there does not appear to be much the Argentinians can do to stop the exploration efforts, short of starting another shooting war, which it is in no condition of doing. There is still much potential along the North and South Falkland Basins, and it is possible that larger reservoirs may still be found during the ongoing seismic surveys.