Australian oil and gas producer Santos has lowered its full-year 2026 oil and gas production guidance from 99–105 million barrels of oil equivalent to 99–102 million barrels of oil equivalent, mainly due to production interruptions during the ramp-up of its Pikka oil project in Alaska, the United States, and delays in the commissioning of supporting facilities. Meanwhile, the company’s third-quarter oil and gas production reached 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 cuts at the field; subsequently, the operator of the Kuparuk pipeline shut the pipeline due to a road accident, causing an interruption in crude oil exports. Affected by these factors, Santos also lowered the upper end of its full-year oil and gas sales volume guidance from 108 million barrels of oil equivalent to 105 million barrels of oil equivalent, while maintaining the lower end at 102 million barrels of oil equivalent.
Pikka had reached its lowest expected plateau level before the end of the third quarter, with daily production briefly exceeding 80,000 barrels. The company decided to temporarily hold daily output at about 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 started reservoir injection on August 26, with seawater transported from the Arctic coast to the field via an approximately 75-km pipeline; injection volume reached about 40,000 barrels per day in September.
Despite short-term disruptions at Pikka, Santos’s overall production and sales continued to grow in the third quarter. Australia’s Barossa gas project entered stable production, boosting LNG supply; new crude oil output from Pikka also began to be included in quarterly results. The company’s third-quarter oil and gas sales reached 26.4 million barrels of oil equivalent, up 11% quarter on quarter, and sales revenue reached USD 2.01 billion, up 78% year on year and 49% quarter on quarter.
Production growth and higher LNG sales prices brought Santos’s third-quarter operating free cash flow to about USD 1.07 billion. Of this, cash flow from Papua New Guinea and Alaska operations contributed more than 50%. The company continues to advance water injection and production adjustments at Pikka while maintaining stable production at Barossa.
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Post time: Oct-22-2026