Australia's Santos lowers 2026 production forecast to 99-102 million barrels of oil equivalent

en.Wedoany.com Reported - On October 22, Australian oil and gas producer Santos lowered its full-year 2026 oil and gas production forecast from 99-105 million barrels of oil equivalent to 99-102 million barrels of oil equivalent, mainly due to production interruptions and supporting facility commissioning delays during the ramp-up period of the Pikka oilfield project in Alaska, United States. Meanwhile, the company's third-quarter oil and gas production hit a new record of 26.3 million barrels of oil equivalent, up 23% year on year.

The production constraints at the Pikka project involved two operational events. Commissioning of the seawater treatment plant was affected by weather events, leading to short-term production reduction at the oilfield; subsequently, the operator of the Kuparuk pipeline shut down the pipeline due to a road accident, causing an interruption in crude oil export. Affected by these factors, Santos also lowered the upper limit of its full-year oil and gas sales volume forecast from 108 million barrels of oil equivalent to 105 million barrels of oil equivalent, while maintaining the lower limit at 102 million barrels of oil equivalent.

The Pikka oilfield had reached its minimum expected plateau production level before the end of the third quarter, with daily production once exceeding 80,000 barrels. The company decided to temporarily control daily production at approximately 70,000 barrels, using seawater injection to supplement reservoir pressure, and then raise it to the target level of 80,000 barrels per day. The project's seawater injection system had already commenced reservoir water injection on August 26, with seawater transported from the Arctic Ocean coast to the oilfield through approximately 75 kilometers of pipeline, and injection volume reached approximately 40,000 barrels per day in September.

Despite short-term disruptions at the Pikka project, Santos's overall production and sales continued to grow in the third quarter. The Barossa gas project in Australia entered stable production, driving an increase in liquefied natural gas supply; new crude oil production from the Pikka project also began to be included in quarterly results. The company's third-quarter oil and gas sales volume reached 26.4 million barrels of oil equivalent, up 11% quarter on quarter, and sales revenue reached US$2.01 billion, up 78% year on year and 49% quarter on quarter.

Production growth and rising liquefied natural gas sales prices brought Santos's third-quarter operating free cash flow to approximately US$1.07 billion. Of this, cash flow contributions from Papua New Guinea and Alaska operations exceeded 50%. The company is currently continuing to advance water injection and production adjustments at the Pikka oilfield while maintaining stable production at the Barossa project.