SYDNEY, May 4, 2026, 03:03 AEST
Oil Search Alaska, Santos Limited’s U.S. subsidiary, has moved to expand the permitted C pad at the Pikka oil project on Alaska’s North Slope, adding another near-term execution marker for the Australian producer as first oil draws closer. Petroleum News reported on Sunday that the application covers the not-yet-built C pad, while current drilling is from the A pad.
The U.S. Army Corps of Engineers public notice said Oil Search Alaska wants to modify Pikka, formerly the Nanushuk project, to meet updated safety and logistics needs for operations, drilling and completions. Public comments close May 25. A drill pad is a gravel work area where wells are drilled and equipment is staged.
This matters now because Pikka and Barossa LNG — liquefied natural gas, or gas chilled into liquid for shipment — are the projects Santos is relying on to turn years of spending into production. Santos kept its 2026 production and sales volume guidance at 101 million to 111 million barrels of oil equivalent, a common oil-and-gas output measure, even after a first-quarter revenue miss and disruptions at Barossa.
The oil tape helps explain the timing. OPEC+ agreed on Sunday to lift June output quotas by 188,000 barrels per day, but Reuters reported the increase was largely on paper while disruption around the Strait of Hormuz kept Gulf supply constrained and pushed oil prices above $125 a barrel.
The proposed Pikka work would involve about 46,500 cubic yards of gravel fill and permanent wetland impacts across 3.44 acres, the Corps notice showed. The plan would expand the NDC pad footprint, adjust its access road and add two pipeline valve pads, with the company saying the changes would support drilling, completions and field logistics.
Santos shares last traded at A$8.02 on the ASX, up 0.25%, with recent company notices focused on employee share rights and related securities rather than new operating guidance. Filings showed the issue of 665,283 share acquisition rights, the transfer of 9,517 ordinary shares after rights conversion, and the lapse of 241,097 rights where conditions were not satisfied.
Saul Kavonic, head of energy research at MST Marquee, said after Santos’ first-quarter update that the stock had been helped by “supportive oil price moves.” He also wrote that investors were looking past the revenue miss toward the start-up of Barossa and Pikka, both of which sit close to the company’s near-term growth case. Reuters
Santos has also leaned on its location argument. At its annual meeting in April, Chair Keith Spence said disruption around the Strait of Hormuz highlighted the “strategic advantage” of Australian LNG for Asia-Pacific buyers, while the company said its LNG shipping routes had not been affected by the Iran war. Reuters
The comparison for investors is Woodside Energy, Santos’ larger Australian peer. Woodside reported a first-quarter revenue beat despite cyclone disruption, kept its 2026 production guidance and said realised prices improved as spot markets strengthened, giving the sector a cleaner benchmark for how higher prices may flow through earnings.
But the Pikka filing is still a permit matter, not a final approval. Wetland impacts could draw scrutiny during the comment period, and the wider market case would look weaker if oil prices fall on improved Gulf flows or if Pikka and Barossa slip again. Barclays raised its 2026 Brent forecast because of the Hormuz impasse, but that view rests on disruption lasting long enough to keep supply tight.
For Santos, the next checkpoints are blunt: the Corps process on Pikka C pad, Pikka first oil, Barossa ramp-up and the next OPEC+ meeting on June 7. After the stock’s move back around A$8, the story is less about reserve size and more about hitting dates.
