Pikka Phase 1 is anticipated to produce 80,000 barrels a day of oil gross with first oil anticipated in 2026.
The project has strong fundamentals and is in a world-class oil producing province with significant existing infrastructure, has low unabated emissions intensity and is supported by key stakeholders, including the State of Alaska, the North Slope Borough, the landowner company Kuukpik Corporation and the Arctic Slipe Corporation (ASRC).
Santos is focused on local procurement and local employment as part of the project, with 98 per cent of current employees living in Alaska. Phase 1 of the project is expected to create more than 500 jobs and construction of the project will deliver approximately 2600 jobs.
The Pikka Phase 1 project represents compelling value for Santos shareholders given its robust economics and strong local shareholder support.
Santos Managing Director and CEO Kevin Gallagher said Pikka Phase 1 is the right project at the right time in the right location.
“Global oil and gas markets are seeing increased volatility and countries are looking to diversify their supply sources away from Russia, which according to the International Energy Agency, currently produces 18 per cent of the world’s gas and 12 per cent of its oil,” Gallagher said.
“Low-carbon oil projects like Pikka Phase 1 respond to new demand for OECD supply and are critical for global and United States energy security, that has been highlighted since the Russian invasion of Ukraine.”
“Santos has emission reduction plans to achieve scope 1 and 2 net-zero emissions by 2040 and in-line with that commitment, Pikka will be a net zero project.”
Furthermore, the project is set to add further diversification to Santos’ portfolio and reduces geographic concentration risk.
Pikka Phase 1 will execute a responsible development plan with a small surface footprint and utilise existing infrastructure, including the Kuparuk transportation pipeline and the trans-Alaska pipeline system.
“We have a world-class team with a rich history of successfully carrying out work on the North Slope. With approximately 90 per cent of project spend within North America minimising supply chain risk and civils work already completed, the project is well positioned for execution,” said Gallagher.
The Pikka Phase 1 oil project is located on the North Slope of Alaska and is worth a total AU$3.78 billion gross.
Santos has a 51 per cent interest in the Pikka unit – the remaining interesting is held by Repsol.
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