In the Jan. 21 first quarter report, Santos Ltd. said the North Slope Pikka phase 1 is 98% complete and nearing mechanical completion, with commissioning progressing. Twenty-four wells were drilled and completed at the end of the fourth quarter. The 23rd well achieved the highest productivity to date, producing at an initial rate of approximately 8,000 barrels of oil per day. The 24th well was the second combination well, developing two reservoir sections from the one well.
As Pikka phase 1 nears first production, following the final cost and schedule review, capital expenditure for phase 1 has increased by approximately $200 million Santos share (less than 10% of the total Pikka phase 1 project costs). The majority of this expenditure relates to facilities and has been incurred in 2025.
Santos- total 2025 capital expenditure remains at the lower end of original guidance, with the Pikka phase 1 cost increase offset by lower-than-planned capital expenditure elsewhere in the portfolio.
The Pikka phase 1 increase reflects inflationary pressure on labor and materials across the North Slope, tariffs on production modules for the sea water treatment plant and logistics costs relating to the MacKenzie River transit.
The project remains on track for first oil late in the first quarter of 2026, with ramp up to a plateau of 80,000 bpd expected around the middle of the year.
-KAY CASHMAN
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