News – AU – Oil Search (ASX: OSH) begins design work for Pikka Project in Alaska – The Market Herald

Oil Search (OSH) has commenced front-end engineering and design (FEED) work for the first phase of its roughly $ 3 billion (A $ 38 billion) Pikka project

With final construction approval expected later this year, this work will include completing the design scope, execution plan, budget and schedule, which will reduce project risk and ensure that the design meets the Can derive maximum benefit from the construction of “huge” Nanushuk reservoirs

The first phase of the Pikka project, in which 80000 barrels of oil can be produced per day includes a single initial well – the Nanushuk well B – as well as pipelines, operations pad infrastructure and storage

“The team has already done a tremendous amount of work to deliver a project concept that is cost effective across a variety of oil prices,” said Keiran Wulff, General Manager of Oil Search

“Through FEED, we expect a more detailed and robust project that will further reduce risk and add value to the project,” he added

The project with breakeven costs of less than $ 40 (approx A $ 50) 65) per barrel for Brent crude, including a 10 percent return, is one of several major growth investments in the global energy sector that were postponed after the March oil price crash

last year

With prospects improved, plans have now been revived and Pikka is Oil Search’s first major project outside of Papua New Guinea

To fund the cost of the first phase, the company intends to sell a 15 percent stake in the project that it hopes will cover at least 50 percent of the total cost

Kieran said this is a critical part of Oil Search’s overall capital management strategy, which “coupled with strengthening the energy outlook for low-break-even, low-emission-intensity projects will create confidence in our ability to make a final investment decision later to meet”this year”

Madrid-based company Repsol, which owns 49 percent of the Pikka project, is also expected to sell part of its stake

Oil Search, ASX: Occupational Safety, Alaska, ASX, Project, Petroleum, Energy Industry