BP to sell entire Alaskan business to Hilcorp in $5.6 billion deal

BP yesterday announced that a US$5.6 billion divestment deal had been agreed with private oil and gas firm Hilcorp for its entire remaining business in the US state of Alaska.

The UK-based oil and gas giant said the deal is part of its plans to raise $10 billion over the next two years through asset sales to further strengthen its balance sheet, and wasn’t related to pressure from environment groups to stop drilling in the ecologically sensitive area.

“We have other opportunities that are more closely aligned with our long-term strategy,” said BP’s chief executive Bob Dudley. The sale will enable BP to ‘pursue new advantaged opportunities’, Dudley added.

The transaction will end BP’s 60-year stay in Alaska, and include its interests in the Prudhoe Bay field – the most prolific oil field in US history – and the 800-mile Trans Alaska Pipeline – which the company helped build in the 1970s.

Meanwhile, Hilcorp must now determine how to integrate BP’s 1,600-strong Alaskan workforce into its operation. The firm is Alaska’s largest private operator and specialises in managing and optimising mature oil and gas assets.