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Producers 2025: Santos says first oil draws closer
As of Aug. 27, 2025, Pikka Phase I development was 91% complete, on 22nd well
Kay Cashman Petroleum News
On Aug. 27 mid-morning Alaska-time, Santos Ltd. hosted a live webcast providing an overview of its half-year 2025 results. Led by Santos Managing Director and CEO Kevin Gallagher, the webcast revealed the latest news about the company's Pikka Phase 1 development on Alaska's North Slope.
Gallagher said the project is "progressing well" and that Santos has brought first oil guidance forward from mid-2026 to first quarter 2026, with the ramp-up to plateau of 80,000 barrels per day expected in the second quarter 2026.
"This is another outstanding example of Santos' self-execution project delivery model in action," Gallagher said. "The pipeline was completed a year ahead of schedule and the challenging logistics of river-lifting key processing modules from Canada and barging the seawater treatment plant from Indonesia have been executed flawlessly. Our drilling and completions team have just finished the 21st well, the first combination well with a 10,000-foot-long horizontal section that replaces two wells with one single well."
Combination wells together with "deployment of other innovative drilling technologies and techniques are delivering real cost savings and faster job completion times," he said.
"This represents a significant value upside opportunity for future developments in Alaska. We're now drilling the 22nd well, which will be the longest well in the field with an expected total depth of 27,000 feet," Gallagher said.
Six wells have been "flowed back" in 2025, including three producers, bringing average expected flow rates per well to 7,000 barrels per day at start-up.
AOGA presentation At an Aug. 27, 2025, presentation to AOGA in Anchorage, Pete Laliberte, Santos vice president business development, said all major equipment is now onsite at its Pikka Phase I project.
"This is our core development area, so when we sanctioned Pikka Phase I, we sanctioned it in this core development area with our partner Repsol.'
Laliberte said his colleague Mark Ireland likes to say, 'in this core area we have three Pikkas.'
"I think that we've got the one Pikka development that we're doing right now, but we also have a unit called Horseshoe and a unit called Quokka," Laliberte said.
"In Quokka we're drilling another appraisal well this winter' and in the Quokka and Horseshoe units 'we see 'the potential for two more Pikkas."
In other words, Santos has much more to come on the Slope.
Pikka Phase 1 is going to be developed on some 17,000 acres of land, 1% of the total Santos leasehold on the North Slope, Laliberte said, adding, "So we have a huge amount of running room and this is exactly what our subsurface team is looking at."
"We've also got a major discovery in Lagniappe in the eastern North Slope and that's with our partners, APA Corporation and Armstrong," he said. "And then finally we've got a big NPR (National Petroleum Reserve-Alaska) position -- probably a little bit longer term."
Ahead of curve Santos is ahead of the curve at Pikka. It has announced that first oil will be in first quarter of 2026 rather than midyear as originally anticipated.
"We've been drilling since June of 2023, so after starting in June 2023 we're on the 22nd well -- now this is going to be the longest -- about 27,000 feet," he said. "So really an incredible achievement."
End of 2025? In March 2025, Santos Executive Vice President and President Alaska Bruce Dingeman said the company was in a good position to accelerate first oil to the end of 2025. This, he said at the time, will be "dependent on logistics and weather allowing for the mobilization of key production models by barge up the Hay River."
All the modules made it to Alaska in August 2025, so it remains to be seen whether end of 2025 or first quarter 2026 will be the ultimate first oil date.
XRG acquisition canceled The non-binding, indicative proposal announced on June 16, 2025, by a consortium led by XRG P.J.S.C., a subsidiary of Abu Dhabi National Oil Company and including Abu Dhabi Development Holding Company and Carlyle (the XRG Consortium), to acquire 100% of the issued shares of Santos Ltd. via a cash scheme has been withdrawn by the consortium.
On Sept. 15, 2025, the Santos Board advised the XRG Consortium that Santos expected to enter into a binding SIA (scheme implementation agreement) at the agreed offer price of US$5.63 if a binding proposal was received from the XRG Consortium on acceptable terms on or prior to Sept. 19, 2025.
In response the XRG Consortium notified the Santos Board of its decision to withdraw its proposal and not proceed with the transaction.
The XRG Consortium said it had not found anything in due diligence that would lead it to withdraw its indicative proposal.
The consortium confirmed that it maintains a positive view of the Santos business and has respect for the management team.
The Santos Board had expressed its concern to the XRG Consortium about delays in agreeing to the SIA. The consortium would not agree to acceptable terms that protected the value of the potential transaction for Santos shareholders, Santos said.
Further, under the SIA the XRG Consortium would not agree to an appropriate allocation of risk between it and Santos shareholders. This included the obligation of the consortium to secure regulatory approvals and the provision of a reasonable commitment to the development and supply of domestic gas.
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