Offshore Energy Today recently had an opportunity to interview Rockhopper Exploration Chief Operating Officer, Fiona MacAulay. Rockhopper is an oil and gas exploration company based in UK, with interests in the Falkland Islands. The company was recently awarded 40% interest in licence offshore Croatia and applied for acreage offshore Montenegro.
MacAulay is a geologist with over 25 years of experience in the oil and gas industry including time at Mobil, Amerada Hess and BG. She joined Rockhopper in 2010 immediately following the Sea Lion oil discovery, off the Falkland Islands, and was an integral member of the senior team which managed the appraisal of the Sea Lion field and discovered the Casper, Casper South and Beverley fields. MacAulay was appointed to the Board in March 2013.
In early 2013, you were appointed a COO of Rockhopper Exploration. Can you tell us what are your primary duties now, as a COO of Rockhopper?
Falkland Basin and our newly acquired assets in the Mediterranean and Adriatic region. We have technical teams in both the UK and Italy that evaluate and manage the assets and those teams ultimately report to me, in my role as COO.
Just recently, the Eirik Raude drilling rig arrived on site in the North Falkland Basin and a couple of days later spudded the first well in the Zebedee prospect. How long will the drilling take?
We anticipate the drilling of each of our four firm wells in the North Falkland Basin to take approximately 30 days.
Rockhopper and Premier Oil together opted for a lower cost development solution in the form of a leased FPSO for the Sea Lion development. Can you provide some reasons as to why you selected this solution?
Sea Lion is a large field of c.400mmbbls of recoverable resource already discovered. By moving to a lower cost phased scheme we will be able to access resources sooner and with a much lower capex cost to first oil, of less than $2bn.
Once the first phase of development is on production (which will access c.160mmbbls of resource) we would look to sanction the next phase of development using the operating cashflow to finance subsequent phases and therefore putting less strain on the Premier balance sheet.
In what phase is the Sea Lion development now? Is everything progressing as planned?
We are on track to award FEED contracts for the FPSO and subsea / installation contracts in Q2 of this year.
When do you expect the production to start?
We anticipate the field to be on stream towards the end of 2019.
Block 9 offshore Croatia
Rockhopper was awarded 40% interest in Block 9 offshore Croatia together with Eni as a partner (60%, operator) in January 2015. The deadline for signing the Production Sharing Contract (PSC) with the Croatian Hydrocarbon Authority is April 2. What happens in between the award and signing of the PSC?
Negotiations of the elements of the PSC documentation that are negotiable.
Were there any provisions to the draft of the PSC and have you managed to negotiate them successfully? How far along are these negotiations?
We are still completing those discussions.
In case you don’t reach an agreement before the deadline, what are your options? Do you lose your license?
That is not a likely outcome.
What’s next after Rockhopper signs the PSC? What are your plans for this block?
To commence the work programme we proposed in our bid.
Are there any commitments regarding this acreage, such as additional seismic surveying or drilling of an offshore well?
In the first phase of the license, we have a commitment to shoot additional seismic and to reprocess existing seismic that is on the block. There is no well commitment in the first phase of exploration.
How long will the exploration period take? What are your obligations during this time?
The first phase is three years at which point there is the option to move into a second phase in which there would be a well obligation.
What’s the estimated value of this project for Rockhopper? Also, what are the estimated costs?
We are unable to disclose that information, but we hope to benefit from lower costs for seismic acquisition in the current market environment.
Croatia’s licensing round and offshore drilling plans have encountered opposition from tourist communities and environmentalist, as there is a concern that a potential oil spill could ruin Croatia’s lucrative tourism industry. Are these concerns legitimate?
Whilst we are not the operator of the block we are totally aligned with ENI in their environmental policies and are pleased to see the strategic environmental assessment programme, that is in place within the Adriatic-Ionian states.
We are also fully supportive of the stringent guidelines the Croatian government will be putting in place to govern operations in this beautiful area.
We have a long history of commitment to strict adherence to environmental guidelines and policies.
Rockhopper has operated in the North Falkland Basin which is a pristine environment since 2004. During that time, we have drilled ten wells and operated multiple seismic campaigns with no environmental incidents. Rockhopper has also undertaken a number of environmental surveys in the Falklands to provide information to local authorities on the regional flora and fauna, thus ensuring a sound understanding of the environmental sensitivities in the area of our operations.
Pending results from Montenegro
Rockhopper Exploration has also applied for acreage offshore Montenegro through Mediterranean Oil and Gas which Rockhopper acquired in 2014. The company applied together with Energean Oil and Gas as an operator.
How many blocks did you apply for and when do you expect the results of this round?
We applied for three blocks, and we would hope to hear the results in the near future.
And what are your initial plans for this acreage?
We would be looking to acquire seismic in order to work up the prospectivity of any blocks we are awarded.
You participated in the panel discussion at Adriatic Oil & Gas Summit in Budva, Montenegro that was held from March 10 – 11, 2015. What were some of the key findings of that conference?
That we should work towards regional cooperation on the key areas of environmental planning, infrastructure and logistics to enable all of the neighboring countries to learn and benefit from an industry that relies on geological structures that do not necessarily conform to territorial boundaries.
Considering the recent drop in the oil price, can you tell us what measures has your company taken in order to prevent losses and deal with the current crisis in the market?
We currently have only minimal production within the company and, therefore, are not as affected as others by the recent fall in oil prices.
Our change to a lower cost solution to Sea Lion was taken just as the oil price was beginning to fall and has proven to be a sensible move.