The federal government has given a key approval to a large North Slope oil project.
Papua New Guinea-based Oil Search announced Thursday that it received a permit from the Army Corps of Engineers for its Pikka development, planned west of Prudhoe Bay.
While important, the Army Corps’ permit isn’t the final word on the project’s future — the company still needs more approvals before it can move forward.
Oil Search estimates the project could produce approximately 120,000 barrels of oil per day. The trans-Alaska Pipeline currently pumps some 500,000 barrels daily, so state analysts think Pikka has the potential to contribute significantly to Alaska’s future production.
“It’s a really important project to the state,” Oil Search Alaska President Keiran Wulff said in an interview earlier this year.
To produce that much oil, Oil Search plans to build up to three drill sites, about 25 miles of roads, about 35 miles of pipelines, a central processing facility, two bridges and an operations center with beds for 200 workers. During construction, the company says it could employ thousands.
The Pikka development is in a new hotspot for oil activity on the western North Slope. ConocoPhillips is also pursuing several big projects in the region.
Pikka would be on state and Native-owned land, as close as seven miles to the village of Nuiqsut.
One of the main questions about the project is how it will affect subsistence hunting and fishing for Nuiqsut residents. Oil Search has made several changes to the project to address the village’s concerns, like relocating infrastructure and planning a new boat ramp for residents on a nearby river.
“We are committed to close collaboration with the people and organizations of Nuiqsut,” Wulff said in a statement accompanying Thursday’s announcement.
But an Oil Search spokesperson said the company is still in talks to reach a land-use agreement with Kuukpik Corp., the Alaska Native village corporation for Nuiqsut. And the company will need dozens more state and local permits before it can begin construction.