BP Has Sold its Alaska Assets to Hilcorp Alaska for $5.6 Billion

Oil giant BP has sold its interests in both the Prudhoe Bay oil field as well as the trans-Alaska pipeline to Hilcorp Alaska for $5.6 billion. Under terms of the agreement, Hilcorp will pay $4 billion in the near-term and $1.6 billion later.

In a press release this week, the company said it is selling all of its assets in the state where it employs about 1,600 workers. The sale must be approved by state and federal regulators.

“BP is committed to providing clarity about their future as soon as possible as part of the transition process with Hilcorp,” the company’s release said.

“Energy is a cornerstone of the Alaskan economy and this investment will help drive growth in local energy production, jobs and state and local revenue for many years to come,” Jason Rebrook, president of Hilcorp Energy, stated.

He added, “Hilcorp has a proven track record of bringing new life to mature basins, including Alaska’s Cook Inlet and the North Slope, and we have a clear understanding that an experienced local workforce is critical to success.”

Prudhoe Bay is the most prolific oil field in U.S. history and has produced more than 13 billion barrels of oil, however production has been declining since the 1980’s.

“We are steadily reshaping BP and today we have other opportunities, both in the U.S. and around the world, that are more closely aligned with our long-term strategy and more competitive for our investment,” BP Chief Executive Bob Dudley stated.

“This transaction also underpins our 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,” he continued.

Justin Furnace, a vice president for Hilcorp Energy, said to The Associated Press that plans for the BP workforce “will develop as we determine how we will integrate the acquisition into Hilcorp’s existing operations.”

Disclaimer: We have no position in BP plc (NYSE: BP) and have not been compensated for this article.