Oil search pikka8/31/2023 When asked to comment on the commissioner’s decision, Oil Search told Petroleum News in a Dec. 3 Oil Search got word from the Alaska Department of Natural Resources that Commissioner Corri Feige ruled in favor of its appeal to overturn the Division of Oil and Gas’ decision regarding a notice to proceed to the construction phase of the Pikka seawater treatment plant and pipeline project.Īccording to then-division Director Tom Stokes, the commissioner remanded it back to the division to issue the notice to proceed, which he did. State supportSupport from the State of Alaska has been another factor for Pikka and other Oil Search, now Santos, projects on the North Slope, of which Pikka was targeted to come online first. But the price had to be right something Morgan Stanley also told its investors was important. Those sources also indicated that Santos is still interested in selling down a 15% interest in Pikka, as was Repsol, the 49% partner in the project and in many other Oil Search leases on the North Slope. Petroleum News sources close to the action say that the local Alaska Oil Search (now Santos) office is fully staffed and continuing to work on its North Slope operations. In her part of the presentation Santos’ new chief financial officer, Anthea McKinnell, said the company’s “balance sheet is ready to fund growth” and that the needed $400 million to fund 2022 capex for Pikka and Dorado could be added at an average $65 per barrel oil price. 15 said the two projects would be “FID-ready” by mid-year. Santos had previously said it expected to make a final investment decision, or FID, on its Pikka project in Alaska in the first half of 2022 and on its Dorado project off Western Australia by mid-2022, but on Feb. Guidance assumes “an average oil price of approximately US$65 per barrel in 2022” would generate sufficient free cash flow to fund forecast major growth projects capital expenditure, likely including the contingent amount” for Pikka and Dorado. A contingent amount of up to approximately US$400 million could be added should the Dorado and Pikka oil projects take final investment decisions in 2022. In its mid-February presentation, Santos’ guidance for 2022 said major growth projects capital expenditure was expected to be in the range of US$1.15 billion to US$1.3 billion. ![]() But those numbers are for the Pikka unit only and not the recent discoveries close to it that could be brought online with Pikka. Independently verified 2C gross reserves for Pikka 1 are 413 million barrels with total Pikka 2C gross resource at 768 million barrels, and the material resource at 968 million barrels. Technically still on its permitting schedule to come online in 2025 at a breakeven price of less than $40 a barrel, a target development IRR of less than 20%, the first phase of the Pikka project is designed to deliver 80,000 barrels of oil per day. ![]() Since the merger of Oil Search and Santos in December, some uncertainty has surrounded the future timing of Pikka development, as buyouts often slow project developments.Īmong the prospective oil projects today, Oil Search’s Pikka Phase 1 development on Alaska’s North Slope is in the top 25% for the lowest GHG intensity, per Wood Mackenzie’s emissions benchmarking tool. Pikka was championed by one of Alaska’s most successful oil entrepreneurs, Bill Armstrong, who brought Oil Search Ltd. Santos Ltd.’s recent presentation of its successful 2021 results and a brief 2022 guidance led to a number of articles bemoaning the future of the Alaska North Slope Pikka project. Pikka project appears on track for 2025 first oil, Alaska office intact Providing coverage of Alaska and northern Canada's oil and gas industry SEARCH our ARCHIVE of over 14,000 articles
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