“So of our total spend, about 60 percent of that is fixed the remaining 40 percent represents contingency and some unit cost labor. “We’ve set up several large engineering, procure, fabricate contracts that are fixed price in nature,” Dingeman told investors. With the FID, the company enlisted an army of contractors. Three years later, the Oil Search workforce swelled to 150 by the time of the Santos merger. When Pikka changed hands from Armstrong to Oil Search, just three employees in Alaska were attached to the project. So hopefully, we can do a bit better than that.” “We’re looking for opportunities to accelerate that after Kevin said that we were sandbagging. “That’s our planning case,” Dingeman assured investors. Last summer, in advance of the final investment decision, Repsol CEO Josu Jon Imaz forecast first oil in 2026. After crude oil prices dropped in 2020, the investment was halved, and Phase 1 was scaled down to 80,000 barrels per day. When Oil Search bought into Pikka, the company expected first oil in 2023, based on a plan to invest $6 billion and produce 120,000 barrels per day. Santos hung its shingle outside within the building, Dingeman kept his role, becoming an executive vice president for Santos and its subsidiary, Oil Search Alaska. Oil Search had set up headquarters in BP’s recently vacated Anchorage high-rise. At least, not until Santos and Oil Search completed a merger in December 2021. Armstrong sold its majority stake in 2018 to Papua New Guinea’s largest energy company, Oil Search-no relation to Santos. Repsol maintains 49 percent ownership of Pikka. The layer just beneath, the Torok formation, extends offshore and may prove to be even richer. Further drilling in 2015 discovered economically viable flow rates, and more exploration to the south established Nanushuk as the largest onshore find in the United States since the ‘80s, with an estimated 768 million barrels of recoverable oil. The significance of the Nanushuk formation had been overlooked for decades until 2013, when the Pikka discovery well Qugruk 3 was drilled by Spanish energy company Repsol and Colorado-based Armstrong Oil & Gas. The river forms the eastern boundary of the National Petroleum Reserve-Alaska, just west of the Pikka leases. Pikka sits on top of the Nanushuk formation, a geologic layer from the early Cretaceous Period, about 100 million years ago, when Dromaeosaurus skulked beneath gingko trees near what is now the Colville River.
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