Page 9 - NorthAmOil Week 14 2022

NorthAmOil PROJECTS & COMPANIES NorthAmOil

Road access dispute complicates

Pikka project in Alaska

ALASKA AUSTRALIAN energy company Santos is said the land permit “does not acknowledge the
mired in a dispute with ConocoPhillips over KRU’s rights of ownership and investments in
road access to its Pikka oil project on Alaska’s the road infrastructure”. The company has the
North Slope. Concerns are now mounting that right to appeal the land permit by April 18.
the $3bn project could be scrapped as a result. ConocoPhillips had previously engaged in
Santos became the operator of the Pikka pro- talks with Oil Search to purchase a 15% stake in ConocoPhillips
ject when it acquired Oil Search for $6.2bn last Pikka, but talks halted when the latter refused
year, taking on a 51% stake in the venture, which to relinquish operatorship. However, Santos’ had previously
is co-owned by Spain’s Repsol. Santos said in managing director and CEO, Kevin Gallagher,
February that the project would be ready for a told Reuters last year that he would be willing engaged in talks
final investment decision (FID) by this summer. to revive talks with ConocoPhillips over the
Pikka is located next to ConocoPhillips’ stake. with Oil Search to
Kuparuk River Unit oilfields, and access is Indeed, a potential sale could go further still. purchase a 15%
needed to Kuparuk’s roads for its operations. Santos is targeting asset sales of $2-3bn this year
ConocoPhillips has requested a payment of and the Australian Financial Review reported in stake in Pikka.
$95mn for long-term use of the roads, which Oil February that the company had offered its entire
Search had rejected. 51% stake in Pikka up for sale. ConocoPhillips,
The roads are located on state land and Oil the largest oil producer in Alaska, is seen as a
Search applied to Alaska’s Department of Natu- potential buyer of the stake but the dispute could
ral Resources (DNR) for a permit to access them. delay efforts to finalise a sale.
A land use permit was granted on March 29 in an If the Pikka project does go ahead, it would
attempt to pave the way towards development of mark the first major oil development on state
the Pikka project while the companies worked land in Alaska in more than a decade. The pro-
out an agreement on the use of the roads. ject would produce 80,000 barrels per day (bpd)
A spokesperson from Santos said the com- in its first phase. It has been estimated that possi-
pany was satisfied with the state’s decision and ble expansion of the project at a later stage could
was still targeting an FID by mid-year. In an ultimately boost the flow of oil down the Trans-
email to Reuters, a ConocoPhillips spokesperson Alaska Pipeline System (TAPS) by up to 25%.™

Week 14 07•April•2022 www. NEWSBASE .com P9