Shares in Oil Search dropped 2.4 per cent to $3.73. The debt capital required has been halved to about $US500 million, said chief financial officer Stephen Gardiner. clear to the market: it’s been very difficult to talk about it until we’ve got it to a stage of maturity and confidence," he said.ĭr Wulff shrugged off the environmental pressures growing around new oil developments on the Alaska North Slope, saying that despite some European and North American banks ceasing support for Arctic activity, the company is "very confident" finance is available. Reserves at Oil Search's Alaskan portfolio have almost doubled since it first acquired its interest in late 2017 and are now at 968 million barrels.
Production would start in 2025 at 80,000 barrels a day, rising to 120,000 barrels a day in a second phase and then beyond. The price at which the Pikka project is estimated to break even – including a return of 10 per cent – has been lowered to $US40 a barrel thanks to the redesign, and Oil Search is aiming to push it down to $US35 a barrel by the final investment decision, which still hinges on market conditions. "This isn't just Oil Search speaking, this is the joint venture speaking". Dr Wulff said a sale process would start in February, with a deal targeted in September ahead of the project final investment decision. Part of that plan is to find a new partner to invest in the Pikka project alongside Oil Search and existing partner, Spanish oil giant Repsol. "We've learnt a serious lesson around ensuring resilience to lower oil prices," he said, reassuring investors at the annual briefing the company would ensure that its next phase of growth would not expose it to similar risks.
Oil Search Chief executive, Keiran Wulff Jessica Hromas Oil Search has emerged from a tough 2020 that managing director Keiran Wulff described as "very humbling" and had prompted "a lot of introspection" after the Papua New Guinean oil and gas producer was forced into a $US700 million equity raising in April after the oil price crash squeezed its balance sheet. Oil Search has unveiled bullish plans for a smaller but higher-return oil project in Alaska but analysts are yet to be convinced and say a deal targeted next year to sell a 15 per cent stake to a new investor will be the ultimate test.Ī final go-ahead for the first stage of the Pikka project on the Alaska North Slope, the cost of which has been halved to less than $US3 billion ($4.1 billion), is targeted for late 2021 as Oil Search revives growth plans put on ice after the oil price slump in March.