77° F

Hilcorp to Buy BP Share in 4 North Slope Oil Fields

Published On: Apr 22 2014 04:31:03 PM AKDT   Updated On: Apr 22 2014 04:54:06 PM AKDT
Hilcorp to Buy BP Share in 4 North Slope Oil Fields

Courtesy BP


Oil company Hilcorp Alaska will buy BP’s stake in four North Slope oil fields and operate three of them, in a deal announced Tuesday expected to affect about 250 BP employees.

According to a statement from BP the assets involved in the sale, which make up less than 15 percent of BP’s Alaska oil production, are being sold to let the company focus on its Prudhoe Bay operations as well as its stake in liquefied natural gas production.

“The sale agreement includes all of BP’s interests in the Endicott and Northstar oilfields and a 50 percent interest in each of the Liberty and the Milne Point fields,” BP officials wrote. “The sale also includes BP’s interests in the oil and gas pipelines associated with these fields.”

BP, along with ConocoPhillips, ExxonMobil and TransCanada, is one of four companies named as partners in a bill to build a gas line which passed the state Legislature late Sunday. The company also expects to invest $1 billion over five years as it brings two new Alaska drilling rigs online in 2015 and 2016, projects it expects to create 200 new in-state jobs.

In a Hilcorp statement John Barnes, the company’s senior vice president of exploration and production, hailed the sale as an opportunity to apply its know-how to increasing production from the established fields.

“We are excited about this acquisition. Our ability to bring new life to mature basins is a great fit for these assets,” John Barnes, Senior Vice President of Exploration and Production for Hilcorp.

Hilcorp has been expanding its Alaska presence in recent years, entering high bids on 19 tracts of 29 tracts auctioned off in the state’s 2013 lease sale. The company is also one of three firms listed as top contributors to Vote No on 1, the main oil industry group opposing a ballot initiative to repeal 2013’s Senate Bill 21, Gov. Sean Parnell’s reduction of oil taxes in a bid to stimulate production.

BP says it’s also working on “providing clarity” to the employees affected by Tuesday’s sale.

“The majority of those BP employees at or supporting Milne Point, Endicott and Northstar are expected to be offered positions with Hilcorp with no break in employment,” BP officials wrote.

The transaction, which BP expects to be finalized by the end of the year pending regulatory approval, will be Hilcorp’s third major in-state acquisition since 2012.