![]() It also noted its successful 2019-20 drilling season with three oil discoveries and two tests: one east of Pikka, Mitquq 1 ST1, flowed at 1,730 bpd and the other near Horseshoe, Stirrup 1, which flowed at 3,520 bpd. Progressing optimization of PikkaIn the information and slides released by Oil Search for the six months ending in June, the company said Phase 1 was within the already permitted scope of the project. Wulff and Oil Search's half year 2020 results said a final investment decision for Pikka was still expected by the end of 2021. Wulff said the cost reductions in the Pikka project have “added significantly to the attractiveness of our Alaskan portfolio” and that Oil Search is “incorporating the results from this season’s very successful Mitquq and Stirrup discoveries” prior to beginning the sell-down. Having already reduced costs to match an oil price in the low $40s, the company is looking to get them below $40 per barrel before re-launching its partial divestment (15%) in a formal sell-down, likely in early 2021. Oil Search continues to work to get development costs down, which Wulff said is critical in today's volatile oil market. Standalone processing in Phase 1?When asked whether Oil Search would definitely be processing its own oil for Phase 1, Wulff said the company was proceeding as though it would be using its own standalone facility with startup in 2025 as planned, but that commercial discussions with neighboring producers for initial production processing might shorten the timeframe to first oil - if the outcome of those discussions proves agreeable to both parties. * Bridge installation across the Miluveach River.ĪIDEA and Oil Search also agreed to try to complete a financing plan for approval by first quarter 2021. * Nanushuk access road to first drilling pad (ND-B road). Oil Search would agree to maintain and operate the roads and bridges, which would be operated as non-public, industrial use with access available to other commercial users and area residents for a fee, or toll.Īccording to Wulff, the following was completed by the end of the first half of 2020: Oil Search sees a financing deal being similar to AIDEA’s agreement for the DeLong Mountain Transportation System with the Red Dog mine in Northwest Alaska.ĪIDEA would issue debt to purchase the surface infrastructure (some existing and others yet to be built) from Pikka’s owners, entering into a long-term use agreement with an associated fee. 5, AIDEA’s board of directors approved a memorandum of understanding with Oil Search to investigate the potential of the authority financing access roads, gravel pads and bridges for the multi-billion dollar Pikka project (also known as the Nanushuk Development), which will ultimately include 26 miles of gravel roads, approximately 70 acres of gravel pads and 120 miles-plus of pipelines, excluding those involved in the seawater treatment plant. AIDEA, created in 1967 by the Alaska Legislature, has “a public purpose” to “increase job opportunities” and “encourage the economic growth of the state, including the development of its natural resources, through the establishment and expansion of … energy” and other projects. 24 in Alaska) said whether the phased approach will alter the peak oil production of the development, which Oil Search previously said would be 135,000 barrels per day, with expectations that value engineering work might increase it.ĪIDEA, or the Alaska Industrial Development and Export Authority, is a public corporation of the State of Alaska that can offer relatively low interest rates and longer payback periods. Neither Wulff nor the half year results released Aug. 25 from Sydney, Australia, Keiran Wulff, top executive of Oil Search Ltd., told Petroleum News that Phase 1 will involve one drilling pad versus three drilling pads, a smaller modular processing facility that can be expanded for subsequent phases and a flowline connecting to existing North Slope infrastructure. In addition to asking AIDEA to finance surface infrastructure for the Pikka project, operator Oil Search Alaska and its partner Repsol have switched to a phased approach for the North Slope unit that will reduce upfront development costs and allow cash flow from Phase 1 oil production to fund the subsequent two phases.Īlthough all details were not yet available as planning and discussions continue between the Pikka partners, on Aug. Oil Search finds way to advance project in volatile oil price environment ![]() Providing coverage of Alaska and northern Canada's oil and gas industry ![]() SEARCH our ARCHIVE of over 14,000 articles ![]()
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