State of Alaska approves Oil Search’s Pikka development plan

Kay Cashman

Petroleum News

On Dec. 22, the Alaska Department of Natural Resources’ Division of Oil and Gas notified Oil Search Alaska that it has approved the company’s 2021 Pikka unit plan of development.

Pikka, a 77,744-acre unit west of the central North Slope, is expected to begin phase one oil production in 2025, quickly reaching 80,000 barrels a day. Most recently Oil Search increased its Pikka/Horseshoe area recoverable contingent oil reserves by approximately 500,000 barrels to nearly a billion barrels.

During the 2021 POD period Oil Search, whose parent company is based in Australia, plans to continue minor civil work in preparation for development. Additionally, further planning and modeling will be conducted, followed by front-end engineering and design, or FEED, engineering for production and operations facilities, pipelines, and drillsite infrastructure.

In its Oct. 30 POD application Oil Search said it plans to make a final investment decision in late 2021 or early 2022 - the POD was followed by a technical review submitted to the division on Dec. 10.

The first phase of Pikka involves just one drill site versus three drill sites per the initial POD.

But in a presentation Dec. 3, Oil Search Alaska COO Matt Elmer updated that information, saying “We hope to get to a final investment decision by the end of the year.”

If sanctioned by Oil Search and its partner Repsol, Pikka development drilling would begin in 2022. The company told Petroleum News 40-50 wells will be drilled for phase 1.

Division Director Tom Stokes told Elmer in the Dec. 22 decision letter that the POD approval is “only for a general plan of development. Specific field operations require separate approval under 11 AAC 83.346, Unit Plan of Operations.”

Under 11 AAC 83.343, the 2022 POD is due Nov. 2, 90 days before the 2021 POD expires.

- KAY CASHMAN