OSL assumes operatorship of Alaska asset

Oil Search Limited has assumed operatorship of the Alaska North Slope following approval by the Committee on Foreign Investment in the US in February.

Oil Search says assuming operatorship three months earlier than expected is a result of support from government, regulators, joint venture partners and native companies.

Following the acquisition, OSL has assigned 127.5 million barrels (mmbbl) of 2C contingent oil resource to the Pikka Unit, which reflects Oil Search’s 25.5 percent share of the estimated gross resources of 500 mmbbl for the Unit.

The Alaskan North Slope is one of the US’ largest conventional oil discoveries in recent times.

Oil Search says it continues to assess the resource potential of its Alaskan assets.

Recent drilling adjacent to Oil Search’s interests has been undertaken by ConocoPhillips, who has announced that all six wells plus a sidetrack, which include two wells on-trend with the Pikka Unit Nanushuk field, encountered oil and verified the potential of the play.

Oil Search will have access to some of the ConocoPhillips well data and discussions are underway to determine areas of cooperation.

During the quarter, Oil Search commenced building an Anchorage-based integrated project team comprising operations, subsurface, development and support personnel. It has been pleased with the level of interest from well qualified candidates with extensive experience in the Alaska North Slope who have been attracted by the opportunity.

Oil Search anticipates that by the end of 2018, approximately 100 people will be located in the Anchorage office, led by President – Alaska, Keiran Wulff.

Oil Search will be undertaking a detailed review and integration of all available information in the second half of the year and will update resource ranges ahead of the final appraisal program in the 2018/19 winter drilling season, before entering FEED for the Nanushuk development in the second half of 2019.

Once all data is integrated, Oil Search considers that there is a likelihood of material upside compared to its current resource estimate. This information will help Oil Search maximise the value of the option to increase their interests in the Alaskan North Slope assets, potentially by exercising and then on-selling some or all of the additional interest to introduce a strategic third party into the joint venture.

Engagement with the community and local companies remains ongoing, with the focus on securing stakeholder alignment on the forward exploration, appraisal and development program.

Author: 
Cedric Patjole