Sea Lion Capex Seen at $1.5bn
Wednesday 21 December 2016
Premier Oil continues to cut the cost of its operated Sea Lion oilfield development off the Falkland Islands as the front-end engineering and design process moves ahead.
Partner Rockhopper Exploration said the estimated capital expenditure of the project to first oil is now $1.5 billion.
“Market engagement with key contractors continues to refine and further reduce costs," Rockhopper said in a trading update on Tuesday.
Life of field costs (which include capex, operating expenditure and lease costs) are estimated at approximately $35 per barrel in the first phase of development.
Premier had said in November that the “technical definition of the project is well advanced” and that the project breakeven price estimate was $45 per barrel. Rockhopper reiterated that breakeven estimate on Tuesday.
Premier plans to develop the Sea Lion discovery using an FPSO, with 160 million barrels of oil expected to be produced over 15 years from 14 wells. Dutch floater giant SBM Offshore won the first phase floater FEED in January, with National Oilwell Varco and Subsea 7 scooping FEED jobs in February.