![]() That decision - the green light on whether to actually build the development - is currently scheduled for the middle of this year. ![]() Without guaranteed road access, Oil Search cannot proceed with its final investment decision for the first phase of the Pikka project, the company said in a letter last month to the Alaska Department of Natural Resources. reported that the company has put its 51% stake in Pikka up for sale.Īround the same time, Santos’ Alaska subsidiary, Oil Search, complained that ConocoPhillips is demanding “exorbitant” fees, totaling hundreds of millions of dollars, in exchange for allowing vehicles to cross its roads that connect the North Slope’s Prudhoe Bay oil hub with the new Pikka prospect. The $3 billion Pikka project could ultimately boost the flow of oil down the trans-Alaska pipeline by 25%, and it faces less opposition from conservation groups and Indigenous residents than other major North Slope developments.īut last month, a news outlet in Australia - home of the project’s new owner, Santos Ltd. The fallout from a merger deal and a multimillion-dollar dispute with ConocoPhillips over road access are threatening to snag one of Alaska’s biggest new North Slope oil developments. The company, along with Armstrong Energy, discovered the promising Pikka prospect. This includes an increase of 40 million bbl (gross) to 767.6 million barrels (gross) 2C contingent resource increase within the Pikka Unit and a gross booking of 200.2 million bbl of 2C contingent resources in the Quokka (Mitquq) and Horseshoe (Stirrup) trends.A drill rig works for Repsol at its Colville Delta operations in 2014. The company noted also a 33% increase in 2C contingent resources in its Alaskan North Slope acreage to a gross of 968 million bbl from 728 million bbl, of which 494 million bbl is net to Oil Search. ![]() ![]() It intends to sell 15-51% of its interest in Pikka and other Alaskan assets. Oil Search plans to launch a formal divestment process in first-quarter 2021, either solely or in cooperation with JV partner Repsol. Works also included construction of the Pikka B drill site, the production facility and operations center pads, a 58-m long bridge over the Miluveach River, and an 18.5-km gravel road. This year Oil Search completed civil works for road construction to Pikka drill site B. The design enables Pikka field to be brought on stream with a facility that meets the original processing requirements plus the ability to add capacity during subsequent phases. Following detailed engineering and value optimization studies this year, costs savings have been achieved by using a modular, truckable process facility design with standardized equipment. Oil will be produced at a breakeven cost of supply of less than $40/bbl, it said. Oil Search says the slimmed down initial project cost is expected to be less than $3 billion. A final investment decision is expected by late 2021 leading to first oil production in 2025. The initial project will be based on a single drill site development with a production capacity of 80,000 b/d. The Oil Search Ltd.-operated joint venture on the North Slope of Alaska is preparing to enter the front-end engineering and design (FEED) stage for its proposed Pikka Phase 1 oil development early in 2021.
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