Israeli upstream firm Navitas has exercised an option to acquire a second floating production, storage, and offloading vessel for its USD 2 billion Sea Lion project in the waters off the Falkland Islands, bringing the company closer to a major expansion of processing capacity at the field.

The move was disclosed in a regulatory notice issued by Rockhopper Exploration, the non-operating partner holding a 35% stake in the license. Rockhopper confirmed on Monday that Navitas, through a subsidiary, had exercised the option to acquire the FPSO named the OSX-1, and that completion of the acquisition is expected within the coming month.

Second Vessel Targets Central Development Area

The OSX-1 carries an aggregate cost of USD 125 million and is intended to serve the so-called central development area of the Sea Lion field. Once operational, the vessel would add 125,000 barrels per day of processing capacity to the project.

A memorandum of understanding related to the acquisition had been signed in May, with Monday's announcement representing the formal exercise of the purchase option.

Rockhopper also indicated it may seek to obtain a stake in the vessel as part of its broader efforts to raise capital.

Samuel Moody, chief executive of Rockhopper, said the update from Navitas reflects its continued commitment to developing and accelerating Sea Lion, and the consequential significant enhancement of the project's value.

Phase One Already Underway in Northern Development Area

While the central development area moves closer to a final investment decision, the first phase of Sea Lion is already advancing in what is described as the northern development area. Drilling work for phase one is scheduled to begin in early 2027, with first oil expected in the first quarter of 2028.

The manufacture of long-lead items required for phase one is ongoing. These include flexible flowlines, wellheads, and subsea Christmas trees, which are among the most time-sensitive components in deepwater field development.

The first FPSO vessel associated with the project, the Aoka Mizu, which has a capacity of 55,000 barrels per day, is currently en route to a shipyard in Asia where preparation work will be carried out ahead of its deployment.

Onshore work is also progressing within the Falkland Islands itself, with activity focused on dock and shore-base components that will support the offshore operations.

Central Area Decision and Production Timeline Set for Later in the Decade

A final investment decision on the central development area, which the OSX-1 is intended to serve, is expected in the first half of 2028.

Oil production from that portion of the field is penciled in to begin by the end of 2030, several years after the first phase is anticipated to come online.

The sequencing of the two development areas means the project is being built out in stages, with the northern area serving as the foundation before the larger central area ramps up.

The addition of the OSX-1 at this stage of planning signals that Navitas is moving to lock in the infrastructure needed for the second phase well in advance of the formal investment decision.

Rockhopper's Role and Capital Strategy

Rockhopper Exploration holds a 35% non-operating interest in the Sea Lion licenses. The company has been exploring options to raise capital, and the possibility of acquiring a stake in the OSX-1 vessel represents one avenue under consideration. No further details on the terms or structure of any potential vessel stake were provided in the regulatory notice.

The Sea Lion project sits in deepwater off the Falkland Islands and has been in development planning for a number of years.

Navitas, an Israeli upstream oil and gas company, holds the operator position and has been driving the project forward following earlier efforts by Rockhopper and previous partners to bring the field to production.

The total project cost is pegged at USD 2 billion, and the addition of a second FPSO at a cost of USD125 million represents a significant capital commitment ahead of the central area investment decision expected in 2028.