Houston’s Hilcorp Energy Co. has completed a takeover of BP plc’s upstream portfolio in Alaska and is nearing a handoff of the midstream unit, allowing the private explorer to become one of the state’s biggest operators.
The $5.6 billion deal struck last year with BP hands affiliate Hilcorp Alaska immediate control of BP Exploration (Alaska) Inc., which owns all of the supermajor’s upstream stakes in the state. Hilcorp is gaining BP’s 26% interest and operatorship of the massive Prudhoe Bay oilfield and stakes in the Point Thomson natural gas field. Hilcorp also is adding to its stakes in the Milne Point oilfield, which it operates.
BP’s legacy midstream business, which include BP Pipelines (Alaska) Inc.’s 49% interest in the Trans Alaska Pipeline System, aka TAPS, is under review by the Regulatory Commission of Alaska, with a decision expected in September.
Hilcorp is “significantly growing and strengthening our footprint in Alaska,” said President Jason Rebrook. “I’m especially proud of the team that’s worked diligently over the past 11 months to close this transaction and put us in a position to be ready for Day One operations.”
With major operations in the Cook Inlet and on the North Slope, Hilcorp already was one of the largest producers in the state. Buying BP’s portfolio was considered a coup, as the London-based operator has worked in the state since the late 1950s.
Hilcorp entered Alaska in 2014, ironically in a purchase of some BP assets. BP’s Alaska production has gotten short shrift in the past few years as other assets became a priority. BP’s Alaska output declined to around 70,000 b/d last year from 125,000 b/d six years ago.
BP Alaska President Janet Weiss commended the producer’s workforce in ensuring the transition to Hilcorp was “safe and seamless. And to the state of Alaska, we deeply value our role in Alaska’s history, and thank the governor and his team for positioning Prudhoe Bay for many more years of competitive production.”
Alaska Republican Lisa Murkowski, who chairs the Senate Energy and Natural Resources Committee, said she appreciated Hilcorp’s commitment to the state.
“This announcement is particularly welcome news for our state as we work to rebuild our economy. Hilcorp has ensured a stable natural gas supply in Cook Inlet and secured a 90% local hire rate in recent years. BP has been a steady and reliable partner in Alaska, and I congratulate both companies on the successful closing of this portion of the sale.”
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