Oil patch insider: Santos, Repsol reportedly look to sell 20-25% Pikka; Pokon DEC head

Kay Cashman

Petroleum News

According to recent reports from several news sources that have not been confirmed by Pikka project owners Santos and Repsol, the partners are looking to sell a 20-25% non-operating interest in the phased North Slope project, along with interests in nearby undeveloped Quokka and Horseshoe oil fields. Phase 1 of Pikka is scheduled to come online in 2026 at 80,000 barrels a day.

(See map in the online issue PDF)

Operator Santos is focused on the Pikka Phase 1 development, but in commenting on a Santos North Slope map Joe Balash, Santos senior vice president of external affairs, said in a Feb. 5 presentation "as you move in sort of a clockwise fashion you see Quokka and Horseshoe as well as some non-unitized acreage. We are a significant holder of state leases, and this area in particular is focused on the Nanushuk formation and plays. These are clinoforms, stratigraphic traps that exist in succession going east to west. And we think there are quite a number of them," he added.

"Our expectation is that the rocks can sustain multiple projects going forward in the 80,000 barrels per day increments for quite some time," Balash told members of the Alaska Senate's Resources Committee.

According to Reuters, one of the aforementioned news sources, the companies are "working with an investment bank to jointly sell a combined minority stake of between 20% and 25% in Pikka, alongside partial interests in the Horseshoe and Quokka fields." Reuters quotes sources that requested to remain anonymous because the discussions are confidential.

A Petroleum News source says that investment bank might be Moelis.

Upstream reported that the deal could potentially be worth $1 billion.

Pikka, Quokka and Horseshoe are all west of the central North Slope.

The Pikka leases are currently split 51-49 with operator Santos holding the larger share.

According to Reuters Pikka has been valued at about $4.5 billion by consultancy firm Rystad Energy.

Balash was asked how much in direct revenues Santos' first North Slope development would mean for the state of Alaska.

"Just in terms of the 30-year life of phase 1, all-in taxes, royalties, property tax and the like at a roughly $65 per barrel long-term price, around $7 billion to the state treasury," Balash replied.

"Now one thing you might be asking yourself is how an Australian company is going to execute a project in the Arctic. We're well accustomed to dealing with sand, but snow and ice is a little bit different. So as the business unit has been assembled here, we put a premium on attracting talent that is from Alaska with Arctic experience," he said.

Another selling point for Pikka is it is a low carbon-intensity project that will be net-zero scope one and two emissions from first production.

"I am very excited about our Carbon Solutions business, which continues to progress projects in Australia, PNG and Alaska, where we are executing agreements with Alaskan landowners to generate nature-based carbon credits for our Pikka project," Santos Managing Director and CEO Kevin Gallagher said in a Feb. 21 presentation.

Commissioners Pokon, Munoz confirmed

Pokon joined DEC in February 2020 from the Alaska Department of Law where she most recently served as a Senior Assistant Attorney General assigned to support DEC.

Previously, Pokon represented the North Slope Borough in natural resource and environmental matters and was a law clerk for the Fairbanks Superior Court.

She earned a bachelor's degree in history with a minor in chemistry from Hamilton College. She also achieved a JD and a Master of Studies in Environmental Law from Vermont Law School.

Cathy Mu- oz was confirmed by the Alaska Legislature as commissioner of Labor and Workforce Development. Mu- oz joined the Department of Labor and Workforce Development in December 2018 as deputy commissioner.

She was named acting commissioner in January of 2023.

Mu- oz represented Juneau for four terms as a member of the Alaska House of Representatives, and three terms on the City and Borough of Juneau Assembly.

--Oil Patch Insider is complied by Kay Cashman