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British oil major BP exits Alaska with $5.6-billion sale to private explorer Hilcorp

British oil major BP said on Tuesday it had agreed to sell its Alaskan operations for US$5.6 billion to privately held oil and natural gas explorer Hilcorp Alaska as part of its divestment plans.

BP said the deal, which includes interests in the giant Prudhoe Bay field and Trans Alaska Pipeline, is part of its plans to raise US$10 billion over the next two years through asset sales to further strengthen its balance sheet.

The deal with the Alaskan company comprises US$4 billion that is payable in the near term and $1.6 billion in earnout payments later.

“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 Officer Bob Dudley said.

BP’s net oil production from Alaska is expected to average almost 74,000 barrels a day in 2019, the company said in a statement.

The divestment comes couple of months after BP agreed to sell its interests in the Gulf of Suez oil concessions in Egypt to Dubai-based Dragon Oil for an undisclosed sum.

BP also said about 1,600 employees were currently associated with its Alaskan business, adding that it was “committed to providing clarity about their future as soon as possible as part of the transition process with Hilcorp.”

© Thomson Reuters 2019

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