There were no fireworks, but key Alaskan assets owned by BP have quietly transferred to Hilcorp as the $5.6 billion deal starts to close, Kallanish Energy reports.
The transfers became official at 12:01 a.m. Wednesday.
The transfers included BP’s upstream Alaska assets and its stake in the Prudhoe Bay oil field on Alaska’s North Slope, as BP prepares to exit Alaska. It came after state regulators had approved the transaction after a lengthy review of the deal and Hilcorp finances.
Hilcorp is now the operator of Prudhoe Bay and is the No. 2 oil producer in Alaska.
The two companies are continuing to work with regulators to complete the midstream sale including BP’s stake in the 800-mile Trans-Alaska Pipeline System.
That portion of the deal is expected to close by the end of September.
London-based BP issued a brief statement to acknowledge the transfers and privately held Hilcorp with headquarters in Texas issued its own brief statement.
The upstream assets comprise the vast majority of the deal value, BP said in its statement.
“Today marks a new era for Prudhoe Bay. It is a world-class field and Hilcorp is well-positioned to take it into the future and maximize value for the state of Alaska,” said William Lin, executive vice president, regions, cities & solutions, in a statement.
“We wish them the very best for the next phase of Prudhoe Bay’s long life,” he said in a statement.
Janet Weiss, regional vice president, BP Alaska, thanked employees and contractors who did “extraordinary work to make this a safe and seamless transition.”
Said Jason Rebrock, president of Hilcorp, “Today we are significantly growing and strengthening our footprint in Alaska.”
The company has tripled its Alaska workforce to about 1,4000 and more workers are expected to be hired in the coming months, the Alaska Energy Desk reported.
The overall $5.6 billion transaction that had been announced last August includes BP’s upstream Alaska business, operations at Prudhoe Bay and the pipeline. BP had a 26% stake in Prudhoe Bay.
The assets being sold also include the Point Thompson and Milne Point fields and leases in the Arctic National Wildlife Refuge.
Last April, BP had confirmed its commitment to completing the sale to Hilcorp, making financial adjustments to reflect market conditions
BP has been the operator of the prolific Prudhoe Bay oilfield since 1977. It began working in Alaska in 1959 and drilled its confirmation well at Prudhoe Bay in 1968.
Prudhoe Bay has produced more than 13 billion barrels of oil and may be able to produce an additional 1 billion barrels in the future.
BP has scaled back its Alaska operations in recent years.
Hilcorp is the largest private operator in Alaska. It has been in Alaska since 2011 and has become the dominant producer on Cook Inlet and in south-central Alaska.
In 2014, Hilcorp purchased interests from BP in four operated Alaska North Slope oilfields.
This post appeared first on Kallanish Energy News.