Santos Prioritizes Oil, LNG Growth in Alaska, Australia, Papua New Guinea

Australian energy giant Santos announced Tuesday it is prioritizing growth in crude oil and natural gas production across three regions, including Alaska, according to a Reuters report carried by OilPrice.com. The company's strategic review of its Australian domestic business comes amid "unprecedented market volatility and a changing policy landscape," CEO Kevin Gallagher said.

In Alaska, Santos recently started oil production from the Pikka field. The project is expected to ramp up to 20,000 barrels per day gross over the next few weeks before reaching a planned plateau of 80,000 bpd gross in the third quarter, OilPrice.com reported. Santos operates the Pikka Unit with a 51% stake.

The company also gave the green light this month to a natural gas project expansion in Papua New Guinea. Santos will invest about $160 million net in a brownfield project linking the Agogo Production Facility to the existing PNG LNG gas pipeline. Gross capital expenditure is estimated at $400 million over three years, with the project expected to add around 135 million cubic feet daily of production capacity, according to OilPrice.com.

Domestically, Santos will focus its Australian work on the Beetaloo and Bedout basins, utilizing existing infrastructure to boost scale and profitability. The company will also direct investments to the Cooper Basin, specifically the Moomba Central fields, as part of production ramp-up efforts, OilPrice.com reported.

Separately, Santos highlighted the performance of its Moomba Carbon Capture and Storage (CCS) project onshore South Australia. According to Rigzone, the project has permanently sequestered 2 million metric tons of carbon dioxide equivalent in over 18 months, which Santos says is equivalent to taking 826,000 cars off the road.

Meanwhile, analysts are observing conflicting pressures in the broader oil market. Naeem Aslam, CIO at Zaye Capital Markets (ZCM), outlined that ZCM sees oil being pulled in two directions, Rigzone reported. This sentiment underscores the volatile market environment cited by Santos as it pursues its expansion strategy.