A few dots near the bottom corner of the world map in the southern Atlantic, the Falkland Islands were once at the forefront of a new era for the oil industry as companies scoured the planet for resources.
The oil industry was already grappling with the energy transition, copious supply and signs of peak demand as Covid-19 began to spread. The pandemic is likely to bring forward that peak and discourage exploration, according to Rystad Energy. The consultant expects about 10% of the world’s recoverable oil resources — about 125-billion barrels — to become obsolete.
Larger companies have also begun voicing that realisation for other projects. BP said in June it would evaluate its portfolio of discoveries and leave some undeveloped. Chief of staff Dominic Emery hinted last year at what type of resources might never “see the light of day”. Complicated projects could be shelved in favour of fields that are quicker to develop, such as US shale, he said.
Sunrise is more complex and more costly. The deposit is too deep to be dug up, so instead it’s injected with steam to get the bitumen flowing into a well, from where it can be pumped to the surface. Husky has said its long-term plans include the potential to expand Sunrise but declined to estimate timing or the oil price required. A BP spokesperson said the company is reviewing oil-sands projects.