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Gallagher bullish on AK
Santos top exec says Pikka Phase 2 fully appraised, major permits in place
Kay Cashman Petroleum News
The Pikka Phase 2 project west of Alaska's central North Slope 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."
This information was released on Feb. 18 as part of Santos Limited's 2024 Full-Year Results webcast led by Managing Director and CEO Kevin Gallagher who gave an operations review that was bullish on Santos subsidiary Oil Search (Alaska)'s activities on Alaska's North Slope.
(See graphic in the online issue PDF)
"We continue to see strong progress at our Pikka Phase 1 project in Alaska. The remainder of the pipeline is expected to be installed in this winter season, a year ahead of schedule. Sixteen of 26 wells are now drilled and completed, and we have significantly improved drilling performance with a 25% improvement in drill time over the last few months, down to 30 days per well," Gallagher said.
First oil for Pikka Phase 1, he said, "remains on track for mid-2026 with an early start-up possible but subject to weather and logistics."
Later in the presentation he said: "We will continue to progress the Pikka project for first oil in 2026, if not earlier."
Company officials have mentioned a potential start-up of Pikka Phase 1 as early as the end of this year.
Hydrocarbon markets Gallagher was also upbeat about the future strength of world hydrocarbon markets, saying that "geopolitical tensions and regional conflicts along with the retreat from open to competitive global markets continued to highlight the fragility of global energy systems in 2024, underscoring the value of energy security and affordability."
Alternative technologies for the "energy transition are not developing at the pace or skill required, increasing long term reliance on hydrocarbons," Gallagher said, adding "underinvestment globally in upstream oil and gas in recent years is coming home to roost."
Adding a partner? In the Q&A session of the webcast Gallagher was asked whether the company would consider bringing on another partner in Alaska.
Although he would not say whether such negotiations were underway, he did say it was "possible" they would be interested in adding a partner. And that Santos would only be interested in a "strategically aligned partner."
Gallagher also said, "We have an excellent resource position on Alaska's North Slope, supplying future expansion opportunities" beyond Pikka Phase 1 and 2.
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