The project also became mired in a dispute with ConocoPhillips over road access.Īlaska political leaders quickly celebrated the news on Tuesday, including Republican Sens. in 30 years.īut Pikka’s prospects were recently challenged by a slew of financial institutions announcing they would not back oil developments in the Arctic, due to concerns about climate change. The Nanushuk play is considered one of the largest onshore conventional hydrocarbon discoveries in the U.S. The Nanushuk’s oil potential was announced several years ago by wildcatter Bill Armstrong, after previous exploration drilling by other companies overlooked it. The Pikka field is part of the Nanushuk geologic formation. “Global oil and gas markets are seeing increased volatility and countries are looking to diversify their supply sources away from Russia, which according to the International Energy Agency, currently produces 18 percent of the world’s gas and 12 percent of its oil,” Kevin Gallagher, chief executive of Santos, said in the statement. Santos’ partner in the project is Spanish oil company Repsol. Santos acquired Oil Search of Papua New Guinea last year, which had been working to advance the project. The company said in a statement Tuesday that its investment will be $1.3 billion. The other, ConocoPhillips’ Willow project, has been delayed by litigation and a new Biden administration environmental review. Pikka is one of two major oil prospects on the North Slope. Pikka is located on state land, east of the National Petroleum Reserve-Alaska, and development is expected to generate billions of dollars in state and local tax revenue, primarily through royalties to the state. If developed, the field will significantly boost oil flow in the trans-Alaska pipeline, which has fallen about 75% from its peak in the late 1980s to less than 500,000 barrels daily today.Īlaska leaders and industry observers have long awaited the announcement from the companies, in hopes that work at the field will boost jobs and the Alaska economy. The money will cover the initial phase of development at what’s called the Pikka field, with 80,000 barrels of oil daily expected to begin flowing in 2026, Australia-based Santos said in a statement.

Global oil and gas companies Santos and Repsol said Tuesday that they will invest $2.6 billion to move ahead with development of a huge oil field on Alaska’s North Slope. The company, along with Armstrong Energy, discovered the promising Pikka prospect. A drill rig works for Repsol at its Colville Delta operations in 2014.

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