Harbour Energy has announced its exit from controversial oil and gas projects in disputed waters near the Falkland Islands.
The company – created earlier this year through the merger of North Sea operators Premier Oil and Chrysaor – is withdrawing from the Sea Lion development in the South Atlantic.
Not a strategic fit’
Announcing the decision, London-listed Harbour said: “Management has undertaken a thorough review of the Sea Lion project, in which the group has a 60% operated interest.
“While the Sea Lion discovery has significant resource potential, development of the project is not deemed a strategic fit for Harbour.
“Therefore, the group has decided to explore the options to exit the project and its other licence interests in the Falkland Islands.”
Rockhopper in talks with potential new partner
Harbour’s partner in Sea Lion – targeting as much as 1.7 billion barrels of crude – is Rockhopper Exploration, which discovered the field in 2010.
Rockhopper said it was in talks with Israeli company Navitas Petroleum around its potential entry to the Sea Lion project following Harbour’s decision not to proceed.
The firm added: “Rockhopper will now work with Harbour and the Falkland Islands Government to ensure an orderly exit by Harbour from the Falkland Islands.”
‘Difficult moment’
Rockhopper chief executive Sam Moody added: “This represents both a difficult moment for Rockhopper and a huge opportunity.
“Whilst we are disappointed that Harbour has decided to not proceed with Sea Lion, we remain committed to unlocking its development.
Sea Lion promised to be a world-class resource when Rockhopper made the discovery – in technically challenging waters more than a decade ago.
Political backdrop
Hundreds of millions of dollars and numerous political squabbles later, the prospect still hasn’t delivered any oil to market.
Argentina has previously asked stock markets in New York and London to warn investors of its claim that UK-listed oil firms are working illegally off the Falklands.
At one stage, the UK Foreign Office condemned Argentinian attempts to “destroy the Falklands economy” after a judge ordered the seizure of assets belonging to five companies drilling for oil offshore the islands.
Stark figures show North Sea production could be on course to wrap up by 2030
Argentina’s territorial claims saw it invade the Falklands in 1982, and the war that ensued killed more than 900 people.
Harbour today (September 23) reported pre-tax profits of £87 million for the six months to June 30, reversing losses of around £162m in the same period last year.
