(Bloomberg) -- Santos Ltd. has given the go-ahead for a $2.6 billion oil field project in Alaska to expand its production beyond the Asia-Pacific region.
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The producer and joint venture partner Repsol SA took a final investment decision on phase 1 of the Pikka development on Wednesday, Adelaide, South Australia-based Santos said in an earnings statement. The project is expected to produce 80,000 barrels a day of oil from 2026.
Santos, which became one of the world's top 20 producers following its merger with domestic rival Oil Search Ltd. last year, has been seen as overly dependent on the Asia-Pacific region, with all its major developments in Australia and Papua New Guinea. The company on Wednesday said net profit in the first half more than tripled from a year earlier to $1.2 billion on the back of higher prices for oil and natural gas.
"The project will add further diversification to our portfolio and reduces geographic concentration risk," Santos Chief Executive Officer Kevin Galllagher said in a statement. "Santos has emission reduction plans to achieve scope 1 and 2 net-zero emissions by 2040 and in-line with that commitment, Pikka will be a net-zero project."
Santos has entered into memorandums of understanding with Alaska Native Corporations to deliver carbon offset projects, it said. The company is the operator of Pikka and has a 51% stake while Repsol holds the rest.
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