Drilling currently underway as part of phase one After years of preparation, it’s a very busy and productive season for one of the biggest new oil projects in a decade, the Pikka Project being developed by Santos Ltd. On the Pikka “to-do” list for Santos this winter: n Pipeline construction, 44 miles of it; n the completion of installation of field facilities; and n utilities on Pikka’s initial production pad. Drilling is also underway. This is phase one of Pikka, targeting a 2026 startup at 80,000 barrels per day. Phase two is planned but not yet sanctioned. Contractors have a lot on their plate. Some infrastructure for Pikka was built earlier, mainly the one production pad, Drill Site B, as part of the initial phase. Drill Sites A and C are planned for phase two. About 1,200 will be employed this winter at Pikka and similar numbers next winter and about the same in the following season. Between drilling crews and project labor the workforce will not drop below 1,000 for the duration of the construction. Securing this labor may be a challenge with other work underway this winter on the slope, but Santos believes it can be managed. In terms of supply chain and cost-control issues the extended time taken for engineering and planning allowed Oil Search, now Santos, to lock in contracts. Modular facilities moved to the North Slope so far were built in Big Lake, in the Mat-Su region. Modules for production facilities were moved to the slope from Alberta, where they were fabricated. The standardization of modular design into “truckable” packages represents a savings at Pikka of about $200 million compared with modules built and moved to Alaska by sealift. Pikka’s modules are 90 tons, at 14’x16’x130’. Drilling is underway, too. Five of 45 wells planned for phase one have already been drilled with 41 of these targeting the Nanushuk formation, two drilled to the Alpine “C” formation and two for disposal. The first well drilled is to handle injection of drill fluids and cuttings so that drilling waste isn’t stored on the surface. These are the first production wells targeting the Nanushuk, a large oil accumulation that was known but not considered economic to produce until exploration and development work was started by Armstrong Oil and Gas, an independent that led the early exploration and Repsol. Today, Repsol is 49% partner with Santos’ 51%. Despite its promise, the Nanushuk has not yet seen production other than test flows, although the companies are highly confident in the reservoir and its capability to sustain production. There have been 21 penetrations, or wells drilled, into the Nanushuk and flow tests were conducted in 2019 at the Pikka B and Pikka C appraisal wells, the results which underpin Santos’ confidence. Pikka may be only the first of the Nanushuk projects to be developed. www.AlaskaAlliance.com 15 Photos Courtesy Santos Ltd. CONTINUED on PAGE 16
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