First oil from the project in Alaskan North Slope is targeted for 2025 with an initial investment of under $3bn
Oil Search has announced a renewed focus on its Alaska operations, with plans to make a final investment decision (FID) on the Pikka project in late 2021.
In May 2020, due to the then prevailing economic conditions, the company had decided to delay taking an FID on the project until a recovery in the oil market.
Oil Search is now looking to target first oil from the Alaskan oil project in 2025 with an initial investment of under $3bn. The project involves development of the Pikka field in Alaska’s North Slope Basin.
The company said that it is now well positioned to proceed with the project in spite of the oil price challenges and the Covid-19 pandemic.
Oil Search and its joint venture partner Repsol are preparing to move ahead with the front-end engineering design (FEED) stage of the Pikka project early next year.
Phase 1 of the project will be based on a single drill site development that will have a production capacity of 80,000 barrels of oil per day (bopd).
Oil Search owns 51% stake in Pikka project
The Australian firm owns 51% stake in the Pikka project, while its Spanish partner holds 49% interest.
Oil Search said that it intends to launch a formal sale process, either on its own or in cooperation with its joint venture partner, to sell 15% of its stake in Pikka and other key Alaskan assets.
The company has also announced a 33% increase in its Alaskan oil resources following conclusion and analysis of technical studies on the Mitquq and Stirrup exploration wells, which were drilled during the 2019/20 winter season.
The gross Alaskan North Slope 2C resources in Oil Search’s portfolio have now moved up from 728 million barrels of oil (mmbbl) to 968mmbbl, of which 494mmbbl is the company’s share.
Oil Search managing director Keiran Wulff said: “The latest increase in resources within our Alaskan portfolio continues to underpin the genuine world class nature of our giant Pikka oil field in Alaska.
“Since acquiring the asset from Armstrong in 2018, our programs have increased the gross 2C resource base in the Pikka field alone by 54%, while also discovering additional resources close to the existing field and facilities.
“What is also very pleasing is the paradigm reduction in breakeven cost and halving of the initial capital costs that has been achieved to progress the development at lower oil prices.”