Spanish giant Repsol is marketing a share of its interest in the Pikka development on Alaska’s North Slope.

Joint venture partner Oil Search revealed on Monday that it was looking to sell down a 15% share in the Pikka project ahead of a final investment decision being made later this year.

On Tuesday, Oil Search chief executive Keiran Wulff confirmed that Repsol was jointly marketing a stake in the project alongside its Australia-listed partner.

“We have an agreement with Repsol that it’s a co-ordinated divestment, so we’ve got the option to market around 30% interest in this project which will be attractive to some of the larger companies, or we also have an ability to independently market and divest our own equity,” Wulff confirmed in a call with analysts on Tuesday.

"The strong preference is that we will be marketing it together, we have set up joint teams, we’ve got a joint bank, we’ve got joint advisers, so it’s very much a joint process at the moment.”

Sale timeline

Wulff also provided more details on the anticipated timeline for the planned selldown of the Pikka stake, with the company to take a phased approach to the potential sale.

This will begin with “a series of soft soundings”in March with companies that have previously approached Oil Search and shown an interest in the project, as well as other companies it thinks would be interested.

It will then evaluate the situation and potentially embark on a more broader programme in April, with the aim of having indicative proposals around July or August, with a view to close any deal at FID towards the end of the year.

Oil Search believes its Alaskan North Slope portfolio holds 968 million barrels of best estimate contingent resources, with the Pikka resource comprising 768 million barrels of the total.

Oil Search currently holds a 51% operated interest in Pikka, while Repsol holds a 49% share in the development.

The project has entered the front-end engineering and design phase for the first phase of the development, which will include a single drill site and a production facility with capacity for 80,000 barrels of oil per day, with the ability to add capacity in subsequent project phases.

Oil Search currently estimates the Phase 1 development will cost roughly US$3 billion, while it is estimated it will be able to produce oil at a breakeven cost of less than US$40 per barrel, inclusive of a 10% return.

It also claimed this week the development would have an emissions footprint that is about 75% less than the current average for other North Slope operations.

Field Development

Repsol looking to sell down in Alaska