Busy winter coming for North Slope oil work; Pikka, maybe Willow too, in construction

Things are going to get very busy this winter on the North Slope. Australia-based Santos, Ltd. and ConocoPhillips are making preparations to begin construction on two large new projects that will add 80,000 barrels per day of new oil in 2026 for Santos and its partner Repsol and 180,000 barrels per day in 2029 for ConocoPhillips on its Willow project.

Work at Pikka is a certainty because Santos and Repsol have made the Final Investment Decision, or FID. ConocoPhillips is well along in advanced engineering and planning for Willow, and has made preparations to begin construction this winter, but a final FID is not yet made because of pending environmental litigation.

If that gets cleared this summer or fall the final “go” decision on Willow will follow. That means two major construction programs this winter.

Santos and Repsol are developing a phase one of the Pikka project, which will be followed by a phase two depending on performance of producing wells in phase one as well as market conditions.

Drilling has started on the initial production pad at Pikka and materials for pipelines and modules for production and accommodation facilities are being moved to the North Slope this summer and fall.

The employment impact will be substantial. About 1,000 workers will be building pipelines this winter on Pikka and this will increase to about 1,800 the following year, in the 2024-2025 winter season.

Construction, mostly on field gathering lines and pipelines, must be done in winter on the North Slope so heavy equipment can be moved across ice and snow roads.

Price-Gregory International has the contract for pipeline and Vertical Support Member installation and construction at Pikka, while Worley Alaska is fabricating a facility to grind and inject drill wastes in Anchorage. NANA Construction is building camp units at Big Lake, in the Matanuska-Susitna Borough.

If the next two winters are cold and long enough Santos hopes to get enough work done to avoid a third winter construction season, and to begin production early.

The company plans to do some production from wells prior to phase one startup, sending the crude oil to the nearby Alpine field for processing. That will allow well performance to be evaluated.

Pikka is the first project to produce from the Nanushuk formation on the North Slope, a large oil accumulation that has not yet seen production.

ConocoPhillips is meanwhile proceeding with plans for the winter on Willow, an $8 billion project in the National Petroleum Reserve, or NPR-A. The petroleum reserve is west of the large producing fields on the North Slope, which are on state lands.

“We have about 300 staff and contractors currently working to bring this project to fruition,” company spokesperson Rebecca Boys said in a statement. “We have a thorough execution plan, a robust development concept, and we are well-advanced in detailed engineering. As we move towards FID we will continue placing long-lead material orders and finalize contract awards in support of the project,” Boys said.

Documents filed with the state Division of Oil Gas indicate that ConocoPhillips plans to start installation of Vertical Support Members for field pipelines in January and to continue with pipelines pipeline construction through January 2027.

However, the company has also said that the Willow FID still depends on legal challenges being resolved. A decision from Alaska U.S. District Court Judge Sharon Gleason is expected on environmental lawsuits filed over the federal government’s approval of the project.