Questions over Pikka after CEO resignation

  • Keiran Wulff stepped down as CEO of Oil Search on July 19, drawing questions about the future of the massive and advanced Pikka project on the North Slope. (Photo/Michael Dinneen/For the Journal)

The managing director of an oil company pursuing a major project on Alaska’s North Slope has resigned, raising questions about the future of the project.

Keiran Wulff ran Oil Search’s Pikka project on Alaska’s North Slope for the last three years. He is resigning due to medical issues, but also amid a whistleblower’s complaint about his behavior, according to Rick Lee, Oil Search chairman, in a call with financial analysts on July 19.

A whistleblower’s complaint into his behavior in June prompted the company to begin an internal investigation, Lee said.

“The board entered into discussions with Dr. Wulff following the receipt of recent concerns and complaints about his behavior,” Lee said. “In (the) view of the board, this unacceptable behavior was inconsistent with the standards required under the company’s code of conduct.”

Wulff has been managing a medical condition that recently deteriorated and prompted his resignation, Lee said. The company did not give details on the nature of Wulff’s medical condition.

Oil Search, based in Papua New Guinea with much of its management in Australia, has been working with Spanish oil company Repsol on the Pikka project.

The companies have estimated the Pikka project could produce 80,000 barrels of oil daily in the first phase of development in 2025. That amount would significantly boost the oil flowing through the trans-Alaska pipeline.

The project is located on state land, east of the National Petroleum Reserve-Alaska and ConocoPhillips’ major Willow oil prospect.

Oil Search has been expected to make a final investment decision before the end of this year, determining whether to commit funding to the multibillion-dollar project.

“If the market has felt that that was the case in the past, it’s certainly not the case today,” Lee said.

Lee told financial analysts on July 19 that there is now no specific date for when Oil Search makes the final decision to fund the project.

Among other steps, Oil Search and Repsol must come to agreements with other investors to ensure there is an appropriate level of funding and risk for the project, Lee said.

However, Amy Burnett, a spokeswoman for Oil Search in Alaska, said in a statement that a final investment decision is still targeted for 2021.

“We are continuing to advance Pikka toward a final investment decision, targeted for later this year,” Burnett said. “We have consistently outlined that we are assessing a range of funding options to give Oil Search flexibility to make a (final investment decision) later this year. We’ve also noted that this is a high quality asset and that if there is not a clear value proposition for shareholders or market conditions don’t support a (final investment decision), we will adjust accordingly.”

Oil Search as a company has the same level of passion for the Alaska project that Wulff had, Lee said.

“For us, it’s very much a matter of how and when we fund this project going forward,” he said.

Wulff thanked Oil Search staff for their efforts during a challenging time that saw oil prices plunge during the COVID-19 pandemic, according to a statement from the company. Oil prices have in recent months rebounded to pre-pandemic levels.

“It has been a great privilege to work at Oil Search and I believe the company is very well-positioned for the future,” Wulff said. “It has however, become apparent to me that due to my health challenges, it is becoming increasingly difficult for me to perform at the level required of the position. After considerable reflection and consultation with my family and others including my medical advisers, it is an appropriate time to leave to focus on my health.”

07/21/2021 - 10:19am