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Continuous improvement
120-mile pipeline for North Slope Pikka project basically complete
Kay Cashman Petroleum News
After holding its 2025 annual general meeting on April 10, Santos Ltd. announced that the 120-mile pipeline for its North Slope Pikka project is now substantially complete -- one year early -- with minor tie-in and punch-list work remaining.
This creates the possibility for early startup of the project near the end of this year, instead of mid-2026, depending on weather and logistics which the company says, "will become clearer over the coming months."
According to Santos Managing Director and Executive Officer Kevin Gallagher, "the possibility of early production from Pikka has been created with completion of the pipeline a year ahead of schedule and I am very pleased with the good and improving well results we are seeing as we execute the drilling program."
Gallagher said drilling at the company's 80,000-barrel-per-day Pikka Phase 1 project is "progressing well" with 17 of 26 wells drilled to date.
The results, he said, "compare favorably to pre-drill expectations," with the four production wells tested to date "demonstrating continuous improvement" on hydraulic stimulation.
"The highest initial 30-day production rate is 7,850 barrels of oil per day, with an overall average rate so far of 6,900 barrels per day," Gallagher said.
The grind and inject facility for handling drilling wastes is "up and running, and the seawater treatment plant barge is being readied to leave Indonesia for Alaska in the third quarter of this year," he said.
Gallagher said he visited the Pikka project in March.
Finally, in its Pikka update at the annual general meeting, Santos noted that "No material impacts are expected as a result of U.S. tariffs, with the project supporting U.S. energy policy and goals."
CERA, elsewhere In remarks at the CERAWeek conference in Houston in mid-March, Gallagher said Santos is looking to increase investments in the United States because of the pro-energy policies of U.S. President Donald Trump's administration; additional investment that will include areas near Pikka where the company has several undeveloped prospects, such as Quokka.
"The U.S. has very pro-development policy settings and we have a great project in Alaska and potential around it and the opportunity to invest there in the future," Gallagher was quoted as saying at CERA by Reuters.
Phase 1 of the Pikka project is only 25% of the discovered resource, Gallagher said.
According to Reuters, he told investors last that Santos' annual oil and gas production would grow by more than 30% in two years, in part because of the Pikka project.
Gallagher was equally bullish on Alaska and Pikka at a Feb. 18 Santos 2024 Full-Year Results webcast, in which a slide showed Pikka Phase 1 producing 80,000 barrels of oil per day for five or six years.
Gallagher also mentioned that the Pikka Phase 2 project is fully appraised with all major permits in place. It will be FEED ready this year and is expected to produce 80,000 barrels per day, just like Pikka Phase 1.
A Santos presentation slide said Phase 2 will develop "significant 2C contingent resource from the future NDC3 and NDA3."
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