Santos and Repsol exploring sale of stakes in Alaska oilfields

The assets in question include the Pikka project, alongside interests in the Horseshoe and Quokka fields in the North Slope region.

Santos and Repsol are considering the sale of minority stakes in their jointly owned oilfields in Alaska, a move that could potentially fetch around $1bn, Reuters reported, citing people familiar with the matter.

The assets in question include the significant Pikka project, alongside interests in the Horseshoe and Quokka fields in Alaska’s North Slope region.

The sale is being facilitated by an undisclosed investment bank, according to sources.

Said to be one of Alaska’s largest oil prospects, the Pikka project is expected to have a production capacity of 80,000 barrels oil a day.

The sale would involve non-operating positions, allowing the new stakeholder to earn from hydrocarbon sales without direct involvement in drilling or operational activities, although with responsibility to cover a portion of the costs.

Potential buyer interest could be impacted by factors such as legal and environmental risks.

However, the sources said there is no certainty that a deal will be signed.

ConocoPhillips previously engaged in negotiations to acquire a 15% stake in the Pikka project from Oil Search, an Australian company that Santos acquired for $6bn in 2021.

However, those discussions fell through as Oil Search was unwilling to relinquish its operator rights.

It remains uncertain whether ConocoPhillips has any interest in the current sale.

Despite initial challenges and the harsh Alaskan environment, the Pikka project received the green light in 2022.

Last month, Santos confirmed that the project is on schedule, with production expected to commence in 2026.

Located in the Nanushuk oil formation on state leases, Pikka Phase 1 is estimated to contain 768 million barrels of recoverable oil.

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