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BP sells Alaska business for $5.6 billion

28/08/2019
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It’s official. After decades of operations BP is exiting Alaska with the sale of its Alaskan business unit to Hilcorp for a total consideration of $5.6 billion. The sale will include BP’s entire upstream and midstream business in the state, including BP Exploration (Alaska) that owns all of BP’s upstream oil and gas interests in Alaska, and BP Pipelines (Alaska) Inc.’s interest in the Trans Alaska Pipeline System (TAPS).
BP sells Alaska business for $5.6 billion
(Image via Wikipedia).

“Alaska has been instrumental in BP’s growth and success for well over half a century and our work there has helped shape the careers of many throughout the company. We are extraordinarily proud of the world-class business we have built, working alongside our partners and the State of Alaska, and the significant contributions it has made to Alaska economy and America’s energy security,” said Bob Dudley, BP’s group chief executive.

“However, we are steadily reshaping BP and today we have other opportunities, both in the US and around the world, that are more closely aligned with our long-term strategy and more competitive for our investment. This transaction also underpins out two-year $10 billion divestment program, further strengthening our balance sheet and enabling us to pursue new advantaged opportunities for BP’s portfolio within our disciplined financial framework.”

“As a highly-capable operator with extensive Alaskan experience, Hilcorp is ideally-placed to take this important business on into the future, continuing to optimise its performance and maximise its value for the State of Alaska. We are committed to a safe and smooth transition of operations so that our employees, partners and local, state and federal government officials all feel that we have handed over these important assets in the right way,” Dudley concluded.

This week’s transaction marks the end of a long-association with Alaska for BP.

BP first began working in Alaska in 1959, drilling the confirmation well for the Prudhoe Bay oilfield in 1968 and the in the mid-1970s helped build the 800-mile Trans Alaska Pipeline. BP began producing oil from Prudhoe Bay in 1977. The giant oilfield – the most prolific in US history – has to date produced over 13 billion barrels of oil and is estimated to have the potential to produce more than one billion further barrels.
The sale of its Alaskan business is part of a wider program of divestment by BP
(Image via BP).

BP’s net oil production from Alaska in 2019 is expected to average almost 74,000 barrels a day. BP operates Prudhoe Bay, with a working interest of 26%, and holds non-operating interests in the producing Milne Point and Point Thomson fields. It also holds non-operating interests in the Liberty project and exploration lease interests in the Arctic National Wildlife Refuge (ANWR). In addition to shares in TAPS and its operator the Alyeska Pipeline Service Company, BP is divesting its midstream interests in the Milne Point Pipeline and the Point Thomson Pipeline.

Hilcorp has been operating in Alaska since 2012 and is today the largest private oil and gas operator in the state, currently operating more than 75,000 barrels of oil equivalent a day (boe/d) gross production. In 2014 Hilcorp purchased interests from BP in four operated Alaska North Slope oilfields.

BP continues to develop its business in the US, where between 2005 and 2018 it invested over $115 billion, more than any other energy investor. In the second quarter of 2019, BP’s net oil and gas production from the US averaged over 921,000 boe/d, from major interests in Alaska, onshore Lower 48 and deepwater Gulf of Mexico.

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Tags: Oil & Gas
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BP sells Alaska business for $5.6 billion - Time to read 4 min
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