Australia’s energy giant Santos has announced a clear strategic direction, prioritizing significant growth in both crude oil and liquefied natural gas (LNG) production. This oil and LNG production expansion initiative spans international operations, including a notable presence in Alaska, alongside development within its domestic Australian portfolio and Papua New Guinea.
Santos has recently commenced oil production from the Pikka field in Alaska. This development is a cornerstone of the company’s international growth strategy. Production from the Pikka field is anticipated to increase substantially over the coming weeks, moving towards a gross output of 20,000 barrels per day. The project is on track to reach a planned plateau of 80,000 barrels per day gross by the third quarter. Santos holds a 51% stake in the Pikka Unit, operating the field in partnership with Repsol, which owns the remaining 49%.
Furthermore under the oil and LNG production expansion strategy, Santos gave the green light earlier this month to a substantial natural gas project expansion in Papua New Guinea. This brownfield project involves an investment of approximately $160 million net by Santos. The expansion will connect the Agogo Production Facility to the existing PNG LNG gas pipeline through the construction of a new 19-kilometer pipeline and two additional wells, alongside necessary facility modifications. The total gross capital expenditure for this project is estimated at $400 million over a three-year period. Upon completion, the project is expected to enhance production capacity by approximately 135 million cubic feet per day, with Santos’ net share contributing roughly 54 million cubic feet per day.
Domestically, Santos will concentrate its efforts on oil and LNG production expansion in two primary basins: the Beetaloo and Bedout basins. The company plans to leverage existing infrastructure within these regions to enhance both the scale and profitability of its operations. This approach aims to maximize efficiency and returns. Additionally, Santos will direct investments towards the Cooper Basin, specifically targeting the Moomba Central fields as part of its ongoing production ramp-up initiatives.
