RE: Navitas15 Jun 2025 19:34
ChessGambiteer,
Your unsubtle attempts at deramping are laughable.
Firstly, even a superficial analysis of the nett cash flow from the production of “only” (or a “paltry”) 50k BOPD at Shenandoah shows that it will not just payback the original funding for Shenandoah in less than 3 years, it will also fund the Shenandoah expansion and still generate a healthy profit on top of that.
Secondly, Companies don’t make “attempts” at reaching FID. It’s an ongoing process which is subject to many variables, so it’s nonsense to describe any delay in FID as a “failed attempt”.
In this case, we know that the extension of the current FPSO contract means that it will not be available as soon as originally thought. This has pushed back the date of 1st oil from SL.
If the date of 1st Oil is pushed back, then that will usually have the effect of pushing back FID as well – there is no need to trigger FID and start paying out cash on people / contracts / financing any sooner than necessary.
Although in this case, Navitas have already committed to the Trees, Wellheads and flowlines - because the lead times of those items meant it had to be done before the delay to the FPSO was known about. We also know that they are busy staffing up the project.
Thirdly, SL is not in disputed waters, as you claim. The UK’s possession of the FI is solid. If it wasn’t, Argentina could take the UK to Court – but they never have, as they know that they’d lose. Argentina’s rhetoric (which has died to almost nothing under the current Govt) does make it more difficult to Operate in the FI, as the obvious supply consolidation point would be in Argentina. However, politically that’s not realistic.
Fourthly, the SL development is already being staged in phases, with the first phase set at 50k BOPD. Your “more likely” scenario is complete rubbish. (I’d prefer to use a different adjective, but it would likely get this post deleted).
Reducing it further would make no sense either in economic or practical terms. The fundamentals (and therefore funding) of setting up the supply chain, base, subsea production and support facilities will not significantly change by reducing the initial planned production level any further. You'd nominally save some cash by drilling fewer Wells – but the Capex cost/bbl & Opex cost/bbl would still rise substantially, and that phase of the field would be developed sub-optimally.
It would also delay 1st Oil by several years, as they’d have to start from scratch searching for another FPSO – using a 50k BOPD FPSO to produce 20k BOPD is just silly (again, not the adjective I’d like to use).
Finally, you have conveniently forgotten that Navitas have the CPR for SL (recently confirmed by RKH) to show the banks and therefore to justify the level of expenditure needed, hence the funding required and ultimately the cash flow that can be expected to be able to pay back the loan and finance future
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