Pikka Produces: Santos Announces First Oil

Santos holds a 51 percent interest in the Pikka Unit, with Spanish company Repsol holding the remaining 49 percent. Santos entered the Alaska oil patch in 2021 with the acquisition of Papua New Guinea-based Oil Search. That company had purchased interest in Pikka in 2018 from Armstrong Oil & Gas, the Colorado-based company that teamed up with Repsol to drill exploration wells in 2013 and 2015 that established the Nanushuk formation beneath Pikka as the largest onshore oil find in the United States since the ‘80s.

Santos committed $2.6 billion for Phase 1 of Pikka within a year of acquiring the asset. As of last fall, first oil was anticipated before the end of winter, but the timeline slipped into the second quarter of 2026.

Gallagher says, “The Pikka Phase 1 project has demonstrated Santos’ capability to develop this world-class resource safely, responsibly, and efficiently. We are already implementing technical drilling improvements that save time and cost, and we will continue to drive improved performance into the future.”

Pikka Phase 1 is now in the start-up and late-stage commissioning process. Production is planned to be intermittent while key subsystems are brought online, and then output will be maintained for about one month until water injection is established following the start-up of the Seawater Treatment Plant.

“As we now take Pikka phase 1 into operations, we are transitioning from project execution to our disciplined, low-cost operating model which will maximise the project’s value for our shareholders for the long term,” Gallagher says.

Currently, the project involves twenty-eight development wells, of which all but seven have been stimulated and flowed back in line with pre-drill expectations. Santos is also looking ahead to further phases at Pikka and neighboring units.

“Earlier this year, Quokka-1 appraisal results demonstrated the quality of our broader Alaska portfolio,” Gallagher explains. “With development of the Quokka and Horseshoe Units of the high-quality Nanushuk reservoir ahead of us, we have clear line of sight to strong production growth on the North Slope, subject to continued appraisal, development planning, and final investment decisions.”

The startup of a new North Slope unit has repercussions for the entire industry. “Projects of this scale do not happen overnight; they require years of planning, billions of dollars in capital, and the confidence to invest in Alaska for the long term,” says Steve Wackowski, president and CEO of the Alaska Oil and Gas Association. “These investments will help sustain throughput in TAPS, strengthen American energy security, and deliver jobs and billions more in revenue to Alaska for decades to come.”