Malvinas: Rockhopper buys stake in company to advance Sea Lion oil project

Despite a sharp drop in its stock price due to Argentinas sanctions, British oil company Rockhopper announced the purchase of a 35% stake in a floating production platform as part of the Sea Lion project, which it is developing with Israels Navitas to extract crude oil from waters around the Malvinas Islands.

The company announced on Thursday that it had signed an agreement to acquire SPV for US$44 million. SPV owns OSX-1, a floating production, storage and offloading (FPSO) vessel.

The Sea Lion project, in which Rockhopper holds a 35% stake, aims to become the first oil-producing project in the islands, with production expected to begin in 2028. 

The South Atlantic archipelago is at the center of a long-running sovereignty dispute between Argentina and the United Kingdom.

Sea Lion is located approximately 220 kilometers north of the Malvinas Islands. It is the first oil field discovered in the waters surrounding the islands, a discovery Rockhopper announced in May 2010.

Navitas, which now holds a 65% majority stake, joined the project in early 2020. Five years later, the two companies entered the final investment stage. The project calls for an investment of US$1.8 billion through first oil, expected in March 2028.

A further US$2.1 billion is earmarked for the remainder of the development. The project is expected to have a 30-year lifespan.

The initiative will begin with the Northern Development Area (NDA), before moving on to the Central Development Area (CDA), which will use the OSX-1 unit. The partner companies expect the platform to help boost production to 180,000 barrels per day by the end of 2030.

Rockhopper shares fall At the beginning of this week, British oil company Rockhopper Exploration suffered a sharp decline on the London Stock Exchange: its shares fell 23% and are down 29% over the past month.

The drop occurred after the Argentine government imposed commercial sanctions on Navitas, Rockhopper and 13 other companies involved in the Sea Lion operation. 

Despite this and the growing political tensions, the British firm confirmed that the project remains on track, with commercial production targeted for the first quarter of 2028.

This month, the Argentine government stepped up pressure on companies operating in the Malvinas Islands by introducing a bill to tighten the sanctions regime established in 2011, with penalties targeting companies, shareholders and suppliers.

The Argentine government considers the United Kingdoms activities in the islands and the surrounding maritime areas illegitimate, citing its longstanding sovereignty claim.

Editorial disclaimer: Although the UK refers to the territory as the Falkland Islands, Argentina strongly contests this name. The Buenos Aires Herald uses Malvinas to refer to the islands.

With information from mbito