The Australian company seeking to develop a large oil discovery on Alaska’s North Slope may be purchased by a consortium based in Abu Dhabi.
Santos Ltd. announced earlier this month that XRG PJSC, a subsidiary of Abu Dhabi National Oil Co., has made a buyout offer. Terms are still being negotiated.
The value of the proposed deal is $36 billion, including Santos’ debt.
Santos is one of Australia’s oldest and biggest oil and gas companies. It has operations in Australia, Papua New Guinea (PNG), Timor-Leste – and in Alaska, where it owns 51% of the Pikka prospect on the western North Slope and is the project’s operator. Repsol, based in Spain, owns 49%.
Pikka, if developed, would produce up to 80,000 barrels of oil a day, according to Santos. The field holds about 400 million barrels of oil, and Santos in 2022 issued its formal approval to proceed to project development. The capital cost was estimated at $2.6 billion at the time.
Pikka is located near the ConocoPhillips-operated projects within the National Petroleum Reserve in Alaska. Pikka and ConocoPhillips’ huge Willow project, which is in development, are both connected to the Nanushuk geologic formation, a layer of oil-bearing rock underlying areas of the central and western North Slope.
Aside from its share of Pikka, Santos has part ownership of another oil property on the North Slope. It owns a 25% share of the Sockeye prospect on the eastern North Slope, where operator and 50% owner APA Corp. made a discovery that was announced in March.
If the acquisition by XRG PJSC goes through, the impacts to the Alaska projects are yet to be determined.
State officials have been following the process.
John Boyle, commissioner of the Alaska Department of Natural Resources, by email: “The Department of Natural Resources sees new entrants/investors into Alaska’s oil and gas sector as a positive development.”
There were reports last year about efforts by Santos and Repsol to sell some shares of their Alaska holdings.
In Australia, the idea of Santos being acquired by an Abu Dhabi company has created some controversy. Government and labor union officials there have raised concerns about the takeover, with one regional government proposing some Conditions on the transaction.