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Pikka expanding
Phase 2 pads, roads may be built as early as 2025-2026 winter season
Kay Cashman Petroleum News
Santos Limited's operating subsidiary in Alaska, Oil Search (Alaska), or OSA, is looking to expand the 77,744-acre Pikka unit by 19,664 acres of state land. The Pikka unit is located on the North Slope of Alaska, along the Colville River. The proposed expansion area is south of and adjacent to leases in the current OSA-operated Pikka unit and to leases in the OSA-operated undeveloped Quokka unit.
The expansion application was filed at the end of March with the Alaska Department of Natural Resources' Division of Oil and Gas and with Arctic Slope Regional Corp. A public notice from DNR about the application to expand Pikka was posted June 9.
OSA's expansion application included an amendment to the 2024 Pikka Unit Plan of Development, or POD, as well as the Pikka Unit Plan of Exploration, or POE, specifying activities proposed for the Pikka unit expansion area.
Pikka Phase 2 The amended 2024 POD describes additional activities to advance Pikka Phase 2, which like Phase 1 is designed to produce 80,000 barrels of oil per day.
These include "Concept Select" activities and the drilling of a produced water disposal well into the proposed expansion area which will include an enhanced data gathering program.
The amended 2024 POD also describes proposed Pikka Phase 2 infrastructure.
Concept Select activities for Phase 2 consist of the following:
*Conceptual engineering studies
*Cost estimation and schedule development
*Project concept feasibility and economic analysis
*Pre-FEED engineering activities
*Long lead permitting activities
*FEED bid development
Subject to favorable economic conditions and further project progress, the working interest owners, OSA and Repsol E&P USA, plan to move from the Concept Select stage to the FEED stage in late 2024 or early 2025.
FEED activities will consist of the following:
*FEED engineering and design
*Cost estimate and schedule development
*Drilling and completions engineering
*Well location refinement
*Permitting activities
*Contracting and procurement activities
Appraisal reservoirs The proposed expansion area encompasses lands containing identified resources (appraisal reservoirs) that have been delineated by Pikka unit technical studies, exploration and appraisal wells, and recent Pikka Phase 1 development wells.
Per OSA, multiple identified resources in the expansion area can be co-developed with horizontal wells from the existing NDB pad in addition to other planned Pikka unit pads, including the proposed NDC pad.
The POE describes plans for additional technical studies and the drilling of a well from the proposed NDC pad.
Facilities and infrastructure OSA said in the late March application that procurement and construction is continuing on the Pikka Phase 1 scope, along with planning activities for future phases.
The facilities and infrastructure include the following:
*Nanushuk Processing Facility (NPF): The NPF will receive production from the NDB development pad and future development drill sites, including NDC and NDA, and process it to sales quality crude, as well as compressing lift/injection gas and handling water. The NPF includes power generation for project facilities and a Class I disposal well for excess produced water and other waste streams. Planning for Pikka Phase 2 includes studies and engineering for a potential expansion of the NPF production handling capacity to accommodate additional production from future drill sites, including production from wells drilled into the expansion area. Expansion could potentially double the oil production capacity of the NPF facility to 160,000 barrels of oil per day.
*Development pads: Development drill sites will accommodate drilling equipment and support facilities for both drilling/completion operations as well as production (e.g. gathering, metering, pipeline pigging).
*Infield pipelines and cables: Pipelines and cables from/to the NPF and the drill sites will consist of multiphase production pipelines, water injection pipelines, gas lift pipelines (medium pressure gas for artificial lift), gas injection pipelines (high pressure gas for immiscible water alternating gas injection), fiber optic cables and power cables. Again, this information was in the late March OSA application.
*Other civil infrastructure: All facilities will be supported by gravel pads with connecting gravel roads and bridges. A bridge will be required to cross the Kachemach River and access the NDC drill site. This bridge will be similar to the bridge constructed across the Miluveach River for access to existing Pikka infrastructure
Concept Select studies will be conducted to determine development scope and timelines. Subject to the results of these feasibility studies and Phase 2 project sanction, pads and required access roads may be built as early as the 2025-26 winter construction season.
Signed by Dingeman The application for expansion was signed by Bruce Dingeman, executive vice president of Santos and president of the Alaska business unit.
The leases in the proposed expansion area are owned by the same working interest owners, OSA and Repsol, in the same proportion as the leases in the Pikka unit.
Production from both the existing and expanded Pikka unit will be processed through the same facilities currently being constructed, which are located on surface lands within the current and expanded Pikka unit.
Development, production and processing through common facilities will minimize environmental impacts, OSA said.
The SuperMerge The Pikka unit working interest owners, or WIOs. have acquired several hundred miles of 3D seismic data that covers the unit and proposed expansion area.
In addition to shooting 3D seismic over the current Pikka unit and proposed expansion area, the WIOs have completed additional seismic processing, including a 5-year effort, called the SuperMerge, which was the merging and reprocessing of 21 surveys of varying vintages and previous seismic patchwork merges, creating a continuous dataset from the most modern technology.
These processing products, OSA said, have been utilized for all ongoing exploration, appraisal and development activities and are the basis for ongoing interpretations, geomodel inputs, sequence stratigraphy studies, geohazard analysis, resource evaluations and well planning within the Pikka unit, proposed expansion area and regionally.
"Significant progress on technical work" has been made on consistent datasets in the Pikka unit, the proposed expansion area and adjacent areas since Santos took over in 2018, OSA said.
Oil in the Nanushuk reservoir appears to be the primary geological target in the Pikka unit and the proposed expansion area.
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