Exclusive interview on Falklands Oil progress with Rockhopper CEO Sam Moody

Written for the January 28, 2022, issue of Penguin News. Printed under the headline “Rockhopper meetings ‘very productive’ says CEO”.

Sam Moody, Chief Executive Officer of Rockhopper Exploration, the oil company that hold shares in offshore oil licenses off the Falklands, visited the Islands during the week of January 17. Penguin News spoke to Mr Moody about the state of oil exploration in the Falklands for Rockhopper.

Speaking of the reason for his visit to the Falklands at this time, Mr Moody told Penguin News he always likes to visit and has been coming down regularly since 2005.

“I’ve been visiting here for 17 years,” Sam said, “I do love it down here. It’s good to be back, it was worth the quarantine and the MOD flight.”

In terms of business, Mr Moody said Rockhopper is “still totally committed to doing everything we can to unlock what we think is a very significant Falkland Islands sovereign resource at Sea Lion.”

The Rockhopper CEO expressed a level of optimism regarding the Sea Lion oil project following the signing of Heads of Terms with Navitas Petroleum, “who have a really good, proven, track record in, I would say, unlocking projects that other people have found very difficult to finance.”

Mr Moody noted, “because it’s the financing that’s the key log jam with Sea Lion; and so I’ve come down to meet with the Government to try and see how we can help to facilitate that transaction going ahead.”

On the progress of these meetings Mr Moody said they have been “very productive.”

“In terms of the future, assuming we can get this deal over the line - obviously I’m making no guarantees we can ever make this project work - but I think Navitas give us as good as a chance as anybody ever has of being able to actually get there.”

Mr Moody raised the work of Navitas on another recent project, Shenandoah, in the Gulf of Mexico.

“For a whole pile of reasons other companies had walked away from it; it was reckoned to be complicated and difficult, and within the last probably nine months Navitas have successfully done - in round numbers - a one billion dollar financing in Tel Aviv.”

“They have got real world, proven, financing capability in projects that are difficult to finance.”

The Rockhopper CEO added: “The key thing that needs to happen here is we need to get FIG consent. Nothing happens without that.

“FIG have some work to do, and that’s for them to do. I think we’re hopeful that we might be able to get to definitive documentation during Q1, but there’s no guarantee.”

On the next steps for the project Mr Moody said “we need to build on all of the work that’s been done over the last 10 years.

“There’s hundreds of millions of dollars worth of well results, geological modelling, environmental work, engineering, logistics planning, all of those things have been done - we just need to finesse them to fit our vision of the project.”

Regarding time frame he added “it’s incredibly difficult to put meaningful time-scales around how long that will take, but we’re not talking about reinventing the wheel. We’re talking about building on, and finessing, all of the work that we, and Premier, and latterly Harbour, did; and finding ways to, with Navitas, finally unlock this resource - which is potentially massively valuable to the Falklands.”

For the interest of those more technically minded Penguin News asked about the current state of the development plan.

Mr Moody explained: “the basic technology will be the same.”

“It will still be an FPSO (Floating Production Storage and Offloading vessel) it will still have subsea completions, it will still have direct offtake offshore. It will be, as far as the overarching development concept is concerned, it will be the same technology.”

Mr Moody added: “I think it is highly likely to have fewer wells drilled before first oil than the original plan, but it is highly likely to develop a very material number of barrels of oil.”

Asked whether, with the increasing discussion about transition to renewable energies in the immediate future, Rockhopper could make full use of the Sea Lion Project - Mr Moody said “We all know the energy transition is a good thing, and it’s going to happen.”

Noting that this was a personal view, Mr Moody said: “I don’t think any sensible person would say anything bad about it, but during the transition, which might take some time, it seems to me that the world is going to continue to consume material quantities of, particularly, oil and gas. Coal might be a different thing.”

He added: “You can either develop that oil and gas in responsibly regulated places like the Falkland Islands, where it’s done to a high environmental standard - we’ve got proper regulation and people who know what they’re doing and all of those things - or you can wash your hands of [the production] but continue to consume the product.”

Mr Moody continued: “What that might lead to is all these hydrocarbon molecules being produced in regimes where there aren’t such high environmental standards. Where there’s less good governance, where the broader local population doesn’t benefit properly in a fair way from all the revenues.”

Summarising, he said that if it is accepted “we are going to continue to consume very material amounts of oil and gas” then “the rational thing to do is to produce those barrels in as responsible ways as you possibly can.”