Santos will hold Pikka near 70,000 barrels a day for now, short of its 80,000 target

Santos plans to hold output at its North Slope Pikka field near 70,000 barrels a day for a period before ramping up to its 80,000-barrel target, according to the company's third-quarter report, dated Oct. 22. Santos said the hold lets water injection replenish what it calls reservoir voidage.

"This is a deliberate decision, and part of our disciplined approach to reservoir management," Santos CEO Kevin Gallagher said in the report. He said production would be curtailed "for a short period of time." The report doesn't say how long it will last.

The state's revenue forecast assumes 518,500 barrels a day of North Slope production this fiscal year, more than the Slope produced in any of the past four years. The state is counting on new oil, chiefly from Pikka, to make up the difference.

Santos narrowed its 2026 production outlook to 99 million to 102 million barrels of oil equivalent, a measure that counts gas and oil together, from an earlier range of 99 million to 105 million. It said the change was primarily due to Pikka, citing a delay commissioning the field's seawater treatment plant and two curtailments.

Pikka briefly reached rates above 80,000 barrels a day before the quarter ended Sept. 30, Santos said. Output was then curtailed after a weather event affected the seawater plant, which was still starting up. At the end of September, with 15 production wells and six injection wells online, Pikka was producing about 69,000 barrels a day, up from about 23,000 at the end of June.

The second curtailment came after the quarter ended, when a third-party road accident impacted the Kuparuk pipeline, according to the report. The pipeline's operator temporarily cut flow through the line and suspended gas deliveries to Pikka during required integrity checks. Production has since resumed and ramped up, Santos said.

Pikka started up in the spring and has produced continuously since June, Santos says. The first cargo, 450,000 barrels, was loaded aboard the Polar Resolution at Valdez in August. Five cargoes were loaded in the third quarter.

On Sept. 2, Santos said in a release on seawater injection that water from the treatment plant began moving Aug. 18 through a pipeline of about 75 kilometers, or 47 miles, from the Beaufort Sea. Injection into the reservoir began Aug. 26. Output was then about 40,000 barrels a day, and the company was targeting the 80,000-barrel plateau at the end of the third quarter.

Of 32 development wells drilled, 28 have been stimulated and 26 flowed back, which Santos says is in line with pre-drill expectations. Santos' share of Pikka's production was about 1 million barrels in the quarter, up from 72,000 in the second quarter.

Santos operates Pikka with a 51% stake. Repsol holds the remaining 49%.