BP has agreed to sell its interests in four oilfields on the North Slope of Alaska to Hilcorp, including its interests in the Endicott and Northstar oilfields and a 50% interest in each of the Liberty and the Milne Point fields. Interests in the oil and gas pipelines associated with these fields are also included in the sales agreement.
BP Upstream Chief Executive, Lamar McKay, said that the agreement “will allow [BP] to play to two of our great strengths, managing giant fields and gas value chains. We will now concentrate on continuing development and production from the giant Prudhoe Bay field and working to advance the future opportunity of Alaska LNG.“
Janet Weiss, President of BP’s Alaska Region, emphasised the benefits of the deal: “BP will be able to focus on maximising production from Prudhoe Bay and advancing the Alaska LNG opportunity. Hilcorp takes ownership of two mature oil fields ready for new investment and activity, and it will operate a third field that is primed for accelerated production. And, the state gets another accomplished operator working the North Slope. Thanks to tax reform, Alaska is now on course for increased investment and production and even the possibility of LNG.”
The agreement does not affect BP’s position as operator and co-owner of the Prudhoe Bay oilfield nor its other interests in Alaska. BP also expects to submit a development plan for Liberty by the end of 2014. As a result of the sale and subject to approval, Hilcorp is expected to become the operator of the Endicott, Northstar and Milne Point oilfields and their associated pipelines and infrastructure.
BP remains committed to its plans for increased investment at Prudhoe Bay, including adding two drilling rigs, one in 2015 and a second in 2016, for a total incremental US$1 billion investment over five years.
Approximately 250 employees are associated with the assets included in the agreement. BP stated that the majority of its employees at or supporting Milne Point, Endicott and Northstar are expected to be offered positions with Hilcorp with no break in employment.
Together the assets included in the sale represent approximately 19 700 boe/d of net production for BP, less than 15% of BP’s total net production on the North Slope.
The sale is expected to be complete by the end of the year, subject to state and federal regulatory approval. Financial details of the transaction are not being disclosed.
Adapted from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/liquefaction/23042014/alaska_lng_the_focus_for_bp_458/