THE LINK: JULY 2023 41 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 supply contracts. Drilling is underway on the first of 43 wells planned for phase one with 41 targeting the Nanushuk formation and two drilled into the Alpine “C” formation. The initial well drilled is to handle injection of drill fluids and cuttings so that drilling waste doesn’t have to be stored on the surface. This is a practice followed in other North Slope fields. These will be 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 Repsol, now Santo’s 49 percent partner in Pikka, and Armstrong Oil and Gas, an independent that led the early exploration. Oil Search, a Papua, New Guinea company, bought out Armstrong and led the development work with a 51 percent share. Santos purchased Oil Search and is now the majority owner and operator. 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. Santos has been careful to develop good relations with the nearby Inupiat community of Nuiqsut and the North Slope Borough, the regional municipal government. Nuiqsut owns surface lands in the area through its village corporation, Kuukpik Corp., and both Kuukpik and Arctic Slope Regional Corp., the regional Native development corporation for the North Slope, will share in oil production royalties from Pikka as well as the state of Alaska. Seventy percent of ASRC’s royalties are also shared with other Native regional and village corporations in the state under terms of the 1971 Alaska Native Claims Settlement Act. Santos also aims for Pikka to achieve a “zero carbon” goal, the first for an Alaska oil project, through a combination of emissions reduction technologies on its production facilities and offsetting emissions that cannot be eliminated in field operations through an agreement with an Alaska Native corporation. The field itself is estimated to produce less than 14 tons of carbon dioxide equivalent per 1,000 barrels of oil produced, which is 75 percent less than the North Slope average, based on a Wood Mackenzie benchmarking tool. Pikka may be only the first of the Nanushuk projects to be developed. The formation extends over a broad area and other discoveries have been made south of Pikka and the Alpine field. Exploration is continuing on those. — Tim Bradner
RkJQdWJsaXNoZXIy MTcxMjMwNg==