British Petroleum to quit Alaska

British oil major BP Plc on Tuesday agreed to sell all its Alaskan properties for $5.6 billion to privately held Hilcorp Energy Co, exiting a region where it operated for 60 years.

The deal, which includes interests in the most prolific oil field in U.S. history at Prudhoe Bay, and the 800-mile (1,300-km) Trans Alaska Pipeline, is part of BP’s plan to raise $10 billion over the next two years through asset sales to further strengthen its balance sheet, it said.

For years, BP has been reducing its role in Alaska, where oil production has fallen with declines at the Prudhoe Bay field. BP, which began working in Alaska in 1959, is the operator and holds a 26% stake in Prudhoe, where production began in 1977.

In 2014, BP sold Hilcorp half its share of an Alaskan project. This year, the two were due to decide whether to go ahead with an ambitious $1.5 billion offshore project that requires construction of a man-made island.

Prudhoe has to date produced over 13 billion barrels of oil and is estimated to have the potential to produce more than one billion further barrels. BP’s net oil production from Alaska in 2019 is expected to average almost 74,000 barrels per day.

The Alaska sale pushes BP closer to its goal of selling $10 billion of properties following the 2018 acquisition of BHP’s U.S. shale assets, a $10.5 billion deal that catapulted the London-based company into a major Texas shale producer.

BP previously had said that most of the disposals would come from its shale assets, particularly natural gas fields. The sale would help BP reduce its debt, which rose to 31% of its market capitalization by the end of June.

Source: reuters.com

Tags: contracts, oil, hydrocarbon production, legislation, USA, oil production, drilling, foreign affairs, oil transit

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