BP Exits Alaska

By: Matt Reese / August 30, 2019

British Petroleum (BP) announced this week that they are selling their Alaska operations to Hilcorp Energy Co. for $5.6 billion dollars, ending their six-decade existence in “The Land of the Midnight Sun.”  The sale to Hilcorp Energy Co includes BP’s stake in the Prudhoe Bay oil field, the Point Thomson gas field and the Trans-Alaska Pipeline.  The deal makes Hilcorp Energy Co. the second largest Alaska producer, between leader ConocoPhillips and ExxonMobil.  The proposed deal is subject to state and federal regulatory approval but the deal is expected to be finalized in 2020, according to BP.

The Prudhoe Bay oil field is the most prolific oil field in United States history.  The area has produced approximately 15 billion barrels of crude oil in its 25-year history, or roughly one-fifth of U.S. consumption.  However, Alaska’s production has declined from over 2 million barrels per day in the late 1980s, to under 500,000 barrels per day today.  BP Chief Executive Officer Bob Dudley stated, “We are steadily reshaping BP and today we have other opportunities, both in the United States and around the world, that are more closely aligned with our long-term strategy and more competitive for our investment.”  An example of BP’s reshaping would be their acquisition of shale operations in the Eagle Ford and Permian Basins in 2018 from BHP Billiton for $10.8 billion.  Their current sale to Hilcorp Energy was part of their strategy to divest $10 billion worth of assets between 2019 and 2020.  

BP Blog Picture

Industry experts believe that this most recent transaction is a “sign of the times” and that this will not be the last deal made in the region.   Espen Erlingsen of Rystad Energy stated, “The largest exploration and production companies have been steadily divesting mature late-life assets in order to finance exploration and development in new regions.”  It will be interesting to see if the other two majors left in the region will remain in “The Last Frontier” in the years to come.

 

 

https://oilprice.com/Latest-Energy-News/World-News/BHP-Billiton-Sells-US-Oil-Assets-To-BP.html

https://www.reuters.com/article/us-bp-divestiture/bp-exits-alaska-with-5-6-billion-sale-to-hilcorp-idUSKCN1VH21N

https://www.apnews.com/f84a23423b384d42a9942351ba9fffd0

https://oilprice.com/Energy/Energy-General/BP-Exits-Alaska-To-Double-Down-On-Shale.html

https://www.bloomberg.com/opinion/articles/2019-08-28/bp-s-alaska-sale-is-a-sign-of-oil-s-times

 


Categories: Oil & Gas News, Alaska


Matt Reese

Written by

Matt Reese

With a combined 10 years of customer service and sales experience, I am a detailed and efficient person who provides integrity and exemplary customer service to every business relationship. Consulting, cultivating and caring are qualities that my customers appreciate most.


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