Repsol and the Australian Santos have agreed to invest 2,600 million dollars (about 2,555 million euros) to promote the development of Pikka, the megafield in Alaska that is the largest oil discovery in the United States in the last 30 years, both companies reported.

The final investment decision for this first phase of the project has received the ‘green light’ from Repsol’s board of directors. The group also indicated that further development at the project could bring the total investment in the field to more than $3 billion (about $2.952 billion).

Pikka is Repsol’s first development project in Alaska, where it has been active since 2011 and has made multiple significant discoveries in the North Slope region.

The group led by Josu Jon Imaz owns a 49% stake in the project, while Santos, who became Repsol’s partner in Alaska last year by buying its stake from Oil Search, has 51%. In this way, each of the companies will contribute with an investment of about 1,300 million dollars (about 1,277 million euros).

This total investment of 2.6 billion dollars will cover the initial phase of development of Pikka, and 80,000 barrels of oil per day are expected to start flowing in 2026, which will mean additional supply in markets under pressure due to lower investments in ‘ upstream’ (Exploration and Production) globally in recent years.

In this sense, the CEO of Santos, Kevin Gallagher, considered that this project is “at the right time and in the right place”, since “low carbon emission oil projects such as Pikka Phase 1 respond to the new demand OECD supply chain and are critical to US and global energy security, which has been underscored since the Russian invasion of Ukraine.

At the end of July, at a conference with analysts on the occasion of the presentation of the company’s first half results, Repsol’s CEO, Josu Jon Imaz, already announced regarding this project in Alaska that the final decision was expected to be made of investment in this quarter, “with a first oil forecast in the first half of 2026”.

Repsol, which at the end of 2019 was the first company in the sector to set a goal of being a net zero emissions company by 2050, highlighted that the project is designed with a carbon intensity index that is among the lowest in the global portfolio of the company’s ‘upstream’, which reinforces its commitment to low-emission projects.

The company chaired by Antonio Brufau thus takes an important step forward in one of its main ‘upstream’ projects, which will thus deliver the first production for Repsol in Alaska in 2026.

With a staged development approach, Pikka has been designed to provide “capital flexibility” while delivering top quartile emissions performance, Repsol added.

In this sense, to further reduce emissions, included reduction schemes will be implemented, such as the replacement of diesel with cleaner-burning natural gas to fuel operations or the installation of heat recovery technologies in power generation turbines. .

The entire ‘phase 1’ development will consist of 45 wells to be drilled from a single well pad, using industry-leading technology to reduce environmental footprint, with associated intermediate facilities including a production facility, operating center, a seawater treatment plant and pipelines.

The project has the support of local communities, providing shared value through community development projects, social investment programs, economic activity and local jobs.

This milestone materializes more than a decade of activity by Repsol in Alaska, where the company has led the drilling of 16 exploration and evaluation wells since 2011.

The ‘Horseshoe-1’ and ‘1A’ wells, drilled during the 2016-2017 winter campaign, confirmed the Nanushuk formation as one of the largest onshore conventional hydrocarbon discoveries in the United States in 30 years.

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