15 years in the making: Falkland Islands’ Sea Lion ready to move forward to first oil

December 10, 2025, by Melisa Cavcic

A final investment decision (FID) has been taken for a giant oil project in the North Falkland Basin (NFB), where $1.8 billion will be needed to foot the bill to first oil and $2.1 billion to project completion. This FID comes 15 years after the original oil discovery was made.

Showing the Sea Lion FPSO and the Phase 1 & 2 development field layout; Source: Navitas

The final investment decision for the Sea Lion oil project in the North Falkland Basin was bumped to 2025 last year following a cost hike to $1.4 billion for Phase 1. According to Navitas’ partner, Rockhopper Exploration, its board has taken the FID for the development of Phase 1 of the field located to the north of the Falkland Islands and sanctioned the project.

The firm claims that Navitas Petroleum, as the operator, did the same. As a prerequisite of taking the FID, the boards of both companies have approved the financing arrangements and signed the relevant documentation required to fund Phase 1 of the project. The financial close is subject to a limited number of customary conditions precedent, and Rockhopper expects this to occur over the coming weeks.

All approvals and consents necessary at this stage have been received, with the Falkland Islands’ government giving the go-ahead for the field development and production program for phases 1 & 2 of the Northern Development Area within the Sea Lion field. Following the approvals, the licenses covering the project will move into the exploitation phase, which lasts 35 years, or longer, if needed to complete production.

Sam Moody, Chief Executive Officer of Rockhopper Exploration, commented:“The sanctioning of Sea Lion is a major milestone for Rockhopper and all its stakeholders and represents the culmination of over 20 years of work.

“When we first discovered Sea Lion in 2010, it was a hugely exciting play-opening well, and the vast amount of work undertaken since then, first in the ensuing drilling campaigns and then the many years of engineering and commercial refinement, is now moving towards its ultimate fruition as we move into the development phase.”

Sea Lion runs into setback as financing delays Falkland Islands’ $1.4B oil project

Business & Finance

Following finalization of work undertaken on both a technical and commercial level to support the financing of the project, Rockhopper claims that the total post-FID funding requirement is $1.8 billion to first oil and $2.1 billion to project completion, including contingencies and financing costs.

The company elaborates that the project financing consists of $1 billion of senior debt, of which $350 million is the firm’s debt, with the balance provided via a combination of joint venture equity and post first oil cash flows.

Rockhopper benefits from previously disclosed financing loans from Navitas in relation to the project and, as a result, the firm’s net equity requirement is approximately $102 million, besides the previously disclosed share of a 5% equity overun support which is around $10 million, with a total in aggregate of $112 million.

The potential value of the Sea Lion project proceeding is highlighted in the recent independent resource evaluation conducted by Netherland, Sewell & Associates, Inc. (NSAI) on behalf of Rockhopper, which confirmed total gross full field 2C resource of 917 mmbbls of which 321 mmbbls are attributable to the company’s net working interest.

Sea Lion will be developed in phases. As a result, Phase 1, which has been sanctioned, targets 170 mmbbls (59.5 mmbbls net to Rockhopper) at a peak production of approximately 50,000 bbls/d. The subsequent phases are expected to be self-financing using the excess cash flows of Phase 1.

The first oil from Phase 1 is currently planned for 2028. Phase 2, which forms part of the same FDP approved by the government, is anticipated to recover a further gross 2C resource of 149 mmbbls (52.15 mmbbls net to Rockhopper). Currently, it is anticipated that the first well will not be drilled for over 12 months.

Navitas has entered into several commercial contracts which include, but are not limited to, an FPSO charter agreement and associated EPC and O&M contracts, alongside drilling rig contract, a framework agreement for the supply of drilling and completion services; and an agreement for the engineering, procurement, construction, installation and commissioning of subsea umbilicals, risers, and flowlines (SURF).

As part of the FID process, Rockhopper and the Falkland Islands’ government have entered into a final settlement agreement related to a previously disclosed disputed taxation amount on the farm out to Premier Oil in 2012, as the existing arrangement was incompatible with achieving the FID at Sea Lion. The final settlement agreement will also settle any tax liability in relation to the farm out to Navitas in 2022.

The new arrangement states that the firm will pay the tax liability in instalments, amounting to £30 million on an undiscounted basis. Navitas Petroleum, which sees Sea Lion as “the next big thing,” is the operator of the project with a 65% working interest while Rockhopper holds the remaining 35% stake. Material upside, including Isobel-Elaine, a discovered oil field to the south of Sea Lion, was identified and could be developed under future phases.

Navitas Petroleum Development and Production (NPDP), a subsidiary of Navitas Petroleum, has confirmed the final investment decision for the Sea Lion field development, which is expected to support significant long-term skilled engineering, management, manufacturing, and operations jobs across the UK supply chain over the next 30 years while benefiting the Falkland Islands economy.

The Sea Lion field has 319 million barrels of certified resources, and the initial stage entails drilling 11 subsea wells tied back to a redeployed FPSO vessel. Phase 2 will add a further 12 wells, expected within three years of first oil. NPDP will open an office in Aberdeen in early 2026 to work in conjunction with its London and Stanley teams to deliver Phase 1 of the development.

Ian Ramsay, NPDP Chief Operating Officer (COO), underscored: “The UK and Falkland Islands’ supply chain has already successfully delivered 29 exploration and appraisal wells in the region. The development will be progressed to industry and regulatory standards and create jobs both in the UK and the Falklands.

“We will be responsible and respectful custodians of the Sea Lion field throughout its lifetime. The potential to enhance the economy of the Falklands and responsibly open up a new production basin is an opportunity that provides us all with immense motivation.”