PERTH (miningweekly.com) – ASX-listed Oil Search has announced front-end engineering design (FEED) for Phase 1 of its Pikka project, in Alaska.
The Phase 1 project would include a single drill site and an 80 000 bbl/d production facility, where first oil is planned for 2025.
The Phase 1 project is expected to cost some $3-billion and will produce oil at a break-even cost of supply of less than $40/bl Brent inclusive of a 10% return.
Oil Search said on Monday that the FEED would consist of finalising the design scope, execution plan, budget and schedule for the Phase 1 project, ensuring the design supports optimal expansion to deliver value from the Nanushuk reservoirs.
The FEED will progress engineering and design for the production facility, infrastructure for the single initial drill site, pipelines and operations pad infrastructure, and would deliver on key drilling milestones, including final well designs and drilling processes and systems.
During FEED, Oil Search will also begin detailed engineering and procurement for the seawater treatment plant, which will provide high quality water to support the Pikka project reservoir waterflood.
“This is an exciting time for Oil Search, our working interest partner and for the people of Alaska. This is a key milestone towards realising material value from our Alaska assets and creating long-term benefits for the North Slope community and jobs for Alaskans,” said Oil Search MD Keiran Wulff.
“With an 80 000 bbl/d capacity, Phase 1 of the Pikka project will provide a revenue stream to help support further Alaskan development. With confirmed 2C resources in Alaska of nearly a billion barrels of oil and further opportunity, we are exceedingly optimistic about Oil Search's future in Alaska.”