When the Pikka oil and gas field was discovered in 2013, industry leaders hailed it as the beginning of a renaissance on the North Slope that would extend the life of the trans-Alaska oil pipeline. Now, more than a decade later, the first sellable oil is expected to come from that field soon.
In anticipation, Santos, the company that operates the field, hosted a tour of the facility this week for journalists. Alaska Public Media’s Wesley Early was one of them and discussed it with Alaska News Nightly Host Casey Grove.
This interview has been lightly edited for content and length.
Casey Grove: First, Wesley, where is Pikka anyway?
Wesley Early. Pikka is on the North Slope in the National Petroleum Reserve- Alaska, or NPR-A. It’s about a two-hour drive northwest from Deadhorse. That’s the logistics hub, oilfield camp town there on the slope.
We took a small bus on a long winding road to Pikka, where long metal pipelines flank both sides of the road. It was pretty windy, and snow blew onto the road as we drove. Several flocks of birds like geese and ducks were also on the side. Officials told us they typically come up for spring, and they were early this year. There were a couple arctic foxes and some caribou off the road as well.
CG: OK, here’s the big question: when are we gonna see oil from Pikka?
WE: Well, oil is coming out of Pikka already through test drills, but that doesn’t mean it’s ready to be sold. They’re still working on testing and installing the last bit of equipment at the Pikka facility. Trevor Palaniuk is the operations and maintenance manager for the facility. He laid out what the first oil process will look like.
Trevor Palaniuk: Get the oil out of the ground, get it to the facility, finish commissioning the equipment that actually makes it sale-spec crude, and then we can get it to market.”
WE: Santos admits it’s a little behind its initial schedule on that. At the main camp that we stayed overnight, there was actually this countdown clock to the first oil that had… started counting up.
But they say it’s coming soon. When I toured around the Pikka facility, the word of the day was "imminent." How imminent … that’s still up in the air, but Santos says it should come by the end of the month.
CG: How does the Pikka project play into the wider oil and gas industry in Alaska?
WE: Well, Pikka is part of this westward push across the NPR-A, in an area called the Nanushuk Formation. Most Alaska oil is still produced to the east in Prudhoe Bay. But Pikka is the biggest oil development project on the North Slope in decades.
As we all know, the state government gets the lion’s share of its revenue from oil taxes, royalties and fees, and Pikka is expected to contribute billions to the state over its lifespan. Here’s Joe Balash, a senior VP for external affairs at Santos.
“We expect, in this next year, you know, on a conservative oil price, we'll be contributing somewhere around $250 million to the treasury, and over the life of the project, it gets closer to $7 billion,” he said.
Balash’s name might sound familiar. He’s a former state revenue commissioner and was the Assistant Interior Secretary for Land and Minerals during the first Trump administration. The job with Santos is Balash’s first foray into the private sector, and he says he’s hopeful that the first phase of the Pikka project – which, again, is supposed to bring in $7 billion over its lifespan – will lead to more exploration in the NPR-A.
CG: Tell us about Santos, the company that operates the Pikka Project. What’s their deal?
WE: So Santos is actually a newer player on the North Slope. They acquired the Pikka area in 2021 after merging with the company Oil Search. Pikka is actually their only operation in North America. They’re an Australian company, and before that their only assets were in Australia and Papua New Guinea.
A lot of the people I met on the tour have decades of experience with the oil and gas industry, whether it was with BP, or ConocoPhillips or Hilcorp, but a lot of them had only been working with Santos the last few years.
Santos has invested about $3 billion dollars into the Pikka project, and there are about 45 wells at the drillsite. The operation also includes a processing facility and a seawater treatment plant, both of which were included in the tour.
CG: Did anything stand out to you on the tour?
WE: Right off the bat, the first thing you notice is how new the facilities are. Lots of components had just been built and shipped in from all over the world. Palaniuk, the operations manager, told me a lot of the facilities on the North Slope are decades old, and there are some modern advances in technology that Pikka is able to take advantage of.
One example is the rig’s control center. Palaniuk says, in the past, the control centers were at the rigs themselves, but Pikka’s is able to operate remotely from the camp.
Trevor Palaniuk: So a lot of the older design of facilities, they call it facility siting, wasn’t really well understood. So you had a lot of control rooms put into hazardous areas. That’s the biggest driver here is we got them out of there. They’re away from the site. So if there’s a major incident back there, these guys are safe.
WE: A lot of the rig’s facilities were active while we were there, which meant we had to have a bunch of safety gear -- coveralls, heavy boots, safety glasses, ear plugs. Basically everything a worker has to wear, we were wearing.
Another interesting part of the tour was the focus on the relationship between Pikka and the local village of Nuiqsit, about nine miles away. The Inupiaq village of about 450 people has long had a complicated relationship with oil development, balancing money the local Kuukpik Native Corporation gets from owning the surface mineral rights on the land with concerns over impacts to subsistence hunting.
Santos officials say they’ve been working hard to strengthen their relationship with Nuiqsut. Part of the tour was a boat launch that Santos built specifically for Nuiqsut residents to use when they’re hunting. John Kunaknana is Santos’s community liaison with the village and says the boat launch has helped locals a lot.
John Kunaknana: They would have to go all the way to Oliktok, which is a couple hour drive by boat. It shortens the drive by an hour. So it's well received by the community.”
WE: Other projects include a local bridge project and upgrades to the village’s wastewater treatment plant.
CG: Wesley, it really sounds like they rolled out the red carpet for you.
WE: I have to admit, it was fun and interesting to spend some time on the North Slope. It’s not a place we, as journalists, get to see very often. But I want to point out that, while Santos invited us on this trip and facilitated it and, of course, guided the tour, we did pay our own way to get there.
And we aren’t the only guests Santos is showing the Pikka project to.
A lot of the movement in Pikka comes amid this national push from the Trump administration to, as they put it, “unleash Alaska’s resource potential.” Interior Secretary Doug Burgum is set to tour the facility on Friday, ahead of attending the governor’s sustainable energy conference next week. That will come after a tour of ConocoPhillips’ Willow project, another major oil development that officials hope will bring a lot of revenue to the state.
