OIL Search has entered the front-end engineering and design (Feed) phase of the Pikka project in Alaska, US.
Phase one will include a single drill site and a production facility with 80,000 barrels of oil per day (bopd) capacity.
The petroleum company has majority of its investments in Papua New Guinea.
According to the company, this is an exciting and critical step toward delivering production and revenue from Oil Search’s Alaska assets.
Front-end engineering and design will consist of finalising the design scope, execution plan, budget and schedule and will reduce project risk, ensuring the design supports optimal expansion to deliver full value from the giant Nanushuk reservoirs.
The Pikka project’s first phase is expected to cost around US$3billion (gross) (K10.4bil) and produce oil at a break-even cost of supply of less than US$40 (K138.7) per barrel brent inclusive of a 10 per cent return.
Oil Search’s managing director, Keiran Wulff said: “This is an exciting time for Oil Search, our working interest partner and for the people of Alaska.
“This is a key milestone toward realising material value from our Alaska assets and creating long term benefits for the North Slope community and jobs for Alaskans.
“The team has already done a tremendous amount of work to deliver a project concept that is cost effective over a wide range of oil prices.”
Oil Search has a focused portfolio comprising:
- 29 per cent interest in the PNG LNG Project (operated by ExxonMobil);
- OPERATED oil and gas assets in PNG which contribute 20 per cent of PNG LNG gas and produce all of PNG’s oil;
- 51 per cent interest in our Alaska oil assets which are the largest recent US onshore oil discovery; and
- 22.8 per cent interest in Papua LNG.