The Oil Search Ltd.-operated joint venture on the North Slope of Alaska is preparing to enter the front-end engineering and design (FEED) stage for its proposed Pikka Phase 1 oil development early in 2021.
The initial project will be based on a single drill site development with a production capacity of 80,000 b/d. A final investment decision is expected by late 2021 leading to first oil production in 2025.
Oil Search says the slimmed down initial project cost is expected to be less than $3 billion. Oil will be produced at a breakeven cost of supply of less than $40/bbl, it said. Following detailed engineering and value optimization studies this year, costs savings have been achieved by using a modular, truckable process facility design with standardized equipment.
The design enables Pikka field to be brought on stream with a facility that meets the original processing requirements plus the ability to add capacity during subsequent phases.
This year Oil Search completed civil works for road construction to Pikka drill site B. Works also included construction of the Pikka B drill site, the production facility and operations center pads, a 58-m long bridge over the Miluveach River, and an 18.5-km gravel road.
Oil Search plans to launch a formal divestment process in first-quarter 2021, either solely or in cooperation with JV partner Repsol. It intends to sell 15-51% of its interest in Pikka and other Alaskan assets.
The company noted also a 33% increase in 2C contingent resources in its Alaskan North Slope acreage to a gross of 968 million bbl from 728 million bbl, of which 494 million bbl is net to Oil Search. This includes an increase of 40 million bbl (gross) to 767.6 million barrels (gross) 2C contingent resource increase within the Pikka Unit and a gross booking of 200.2 million bbl of 2C contingent resources in the Quokka (Mitquq) and Horseshoe (Stirrup) trends.
