Background
Plexus was engaged to undertake an independent socio-economic impact study of the Sea Lion oil development in the Falkland Islands. The objective was to assist Rockhopper to understand the socio-economic implications of the development of the Sea Lion field and, on that basis, to make recommendations to Rockhopper for suitable measures to mitigate negative impacts and to enhance the delivery of benefits resulting from the project. The study included a review of key lessons from suitable comparators including the Orkneys, the Shetland Islands, Newfoundland and Norway.
Deliverables
Carried out in close consultation with the Falkland Island Government (FIG), the study was strategic in nature and covered a range of issues including employment, economic development, local business development, immigration, accommodation, infrastructure, inflation, environmental management, governance, culture and lifestyle and social equity. It addressed key issues and impacts and developed mitigation measures for managing non-technical risk and improving Rockhopper’s social performance. Findings from the study included identification of areas in which leadership by FIG was also required.
The study involved extensive stakeholder consultation, issues analysis and scenario development. We mobilised an international team with skills in small island development, petroleum economics, stakeholder engagement, HSE and social performance in the oil and gas sector. Drawing on the team’s broad experience with oil development in remote areas, we designed a tailor-made impact study that resulted in a series of recommendations for Rockhopper and FIG.
Outcomes
The study created a framework within which focused dialogue could be undertaken within the Falkland Islands around material issues that could, in the absence of timely government and industry action, pose risks for the project or have negative implications for the Falkland Islands. It helped to clarify which issues require government action, which ones are the responsibility of the proponent and which ones call for joint government-industry action, and became a tool for building awareness of the issues associated with a new industry, framing dialogue around responsibilities and management and building local partnerships.
The study confirmed that understanding and addressing socio-economic issues early on is key to developing corporate strategy to minimise negative socio-economic impacts, maximising delivery of benefits, establishing good local stakeholder relations, enhancing corporate reputation and building the social licence to operate.
