Not only can the modules be expanded to accommodate future phases but their ability to be transported by road lowers costs and reduces the risk of project delay. The processing facility will use a standardized modular design and off-the-shelf equipment. Phase 1 of the Pikka project reduces the number of drilling pads from three to a single drill site in the core of the Nanushuk Drill Site B, or NDB, and includes a flowline that will allow the project to be connected to existing North Slope infrastructure, Dingeman said. ![]() Part of that recycling included a switch to a phased development approach that, though initially smaller in scale than originally envisioned, will ultimately yield a greater return on investment at a reduced cost. The pandemic and subsequent downturn in oil prices meant that Oil Search’s former concept for the development of the Pikka Unit was unworkable, Dingeman told Meet Alaska attendees, which led the company “through a recycle process to take costs out.” Though ostensibly a setback, the revised development plan ultimately allows Oil Search to increase its overall production at a reduced cost. ![]() “Second, the running room that was introduced by our successful exploration efforts” at Mitquq and Stirrup during the 2019/2020 season. “First, the obvious one, the drop in price,” he said, referring to the low price of crude oil in 2020, which briefly dipped below $10 per barrel due to minimal demand during the early part of the COVID-19 pandemic. Initially, Oil Search planned a $5 billion to $6 billion investment at the unit with first oil anticipated in 2024 and a return of 120,000 barrels of oil per day however, two key events led the company to pivot its plans for the area to a somewhat smaller, phased approach, Dingeman said during a November meeting with investors. “It’s a very important part of that production portfolio.”Ĭentral to that growth is the development of the Pikka unit. “By the end of the decade, Alaska will represent about two-thirds of our production growth over that 10-year period,” Dingeman says. Since then, the three-person Alaska operation has grown to more than 150 year-round employees and a peak of 1,000 seasonal workers spread across eighteen camps during the 2019/2020 exploration and appraisal season. ![]() “We entered into Alaska for new growth and to diversify our operations, both geographically and for a mix of oil and gas production,” Executive Vice President of Alaska Bruce Dingeman told attendees at the Alaska Support Industry Alliance’s Meet Alaska conference in March.
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