In an interview last night Keiran Wulff, top executive of Oil Search Ltd., told Petroleum News that the company and its partner Repsol have decided on a new phased approach for their North Slope Pikka unit development (also known as the Nanushuk Development) that will reduce upfront costs and allow cash flow from Phase 1 to fund the subsequent two phases.
Although all details were not yet available as planning and discussions continue between the partners, Wulff was able to say that Phase 1 will involve one versus three drilling pads, a smaller modular processing facility that can be expanded for subsequent phases and a flowline into existing North Slope infrastructure.
The Nanushuk gravel access road to the first drilling pad was completed in the first half of this year, he said.
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 could conceivably shorten the time-frame to first oil.
Oil Search continues to work to get the costs of the project down, which he said was critical in today's volatile oil market. Having already reduced costs to match an oil price in the low $40s, the company is looking to get them down into the $30s before re-launching its partial divestment (15%) formal sell-down in what is likely to be early 2021.
Wulff and Oil Search's half year 2020 results released by the company Aug. 25 in Sydney, Australia, said a final investment decision for Pikka was expected by year-end 2021.
"The world is a very different place today than it was six months ago," Wulff noted.
- KAY CASHMAN
See full story in Aug. 30 issue of Petroleum News, available online Friday, Aug. 28 at www.PetroleumNews.com
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