SA energy giant strikes oil amidst energy crisis
The state’s top company is announcing a major oil discovery it claims is of “exceptional quality” with another project set to start production soon.
A Santos-owned well in Alaska has been confirmed to be oil-producing, with the company’s CEO today celebrating the “exceptional quality” of the discovery.
Found during a global oil shock caused by the closure of the Strait of Hormuz during the war in Iran, the ‘Quokka-1’ appraisal well could contain 117 million barrels of oil.
That figure is being re-evaluated, but the test well encountered a “high-quality reservoir” according to Santos, the state’s most valuable company according to InDaily’s South Australian Business Index.
The Adelaide-headquartered company that employs approximately 4000 people today confirmed it has discovered “high-quality, light-gravity oil”, and it would now start development planning at the Alaskan site.
CEO Kevin Gallagher said the results confirmed Quokka was a “material addition to Santos’ Alaksa portfolio” alongside its Pikka oil project which is under development.
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“The Quokka-1 results demonstrate the exceptional quality of the Nanushuk reservoir and confirm our geologic assessment of this significant accumulation,” Gallagher said.
“Located strategically to the east of our Pikka phase 1 development, Quokka represents another high-return opportunity that… extends our development runway in Alaska for years to come.”
Meanwhile, first oil at Pikka in Alaska is “imminent”, the company said, with the project mechanically complete.
“Fuel gas was successfully introduced to the plant, a key milestone demonstrating the facility is functioning as planned,” the Santos statement said.
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“First oil from Pikka is expected in the coming weeks.”
Revenue is expected to be generated from oil sales at Pikka two months following first oil.
And the company is restarting production and delivering full capacity at its Northern Territory Barossa Gas Project in mid-April.
In late March, the $6 billion Barossa Gas Project was paused and exports were stopped in order to replace some equipment on the offshore production vessel Santos uses.
“Dry gas seals on the floating production storage and offloading compressors have been successfully replaced to allow production at full capacity, and heat exchangers are now being flushed and cleaned to remove blockages in preparation to recommence production with start-up currently expected around 18 April,” the Santos statement said.
Today, the company said three cargoes of gas had been sold in the first quarter.
Shares in Santos are down 5.56 per cent in early trade today.
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