BP sells some North Slope assets to Hilcorp

Northstar Island (Wikimedia Commons)

Northstar Island (Wikimedia Commons)

BP announced Tuesday it’s selling some of its assets on the North Slope. The company will sell to aging oil fields – Endicott and Northstar – to Hilcorp, a company that is developing oil and gas wells in Cook Inlet. Hilcorp will also buy a 50 percent interest in two other fields- Milne Point and Liberty.

Dawn Patience is a spokesperson for BP Alaska. She says the sale is an opportunity for Alaska to bring new partners to the North Slope.

“This is part of BP’s corporate wide view that we are good at managing and operating giant oilfields like Prudhoe Bay and we have a lot of interest in gas value change such as the Alaska LNG project,” Patience said.

Patience says BP is committed to increasing production under Governor Parnell’s oil tax reform, including adding two new rigs at Prudhoe Bay by 2016.

Hilcorp came to Alaska in 2012, and now operates 18 oil fields in Cook Inlet, after acquiring leases from Chevron and Marathon Oil. Lori Nelson manages external affairs for the company in Alaska. She says Hilcorp wasn’t necessarily looking to enter the North Slope.

“The acquisitions that we made in Cook Inlet were kind of a full plate,” Nelson said. ”But when opportunities like this come around, it’s not our timing, it’s the sellers and we were certainly open to that opportunity and here we go again.”

Nelson says the company plans to extend offers to the vast majority of the 250 BP employees associated with the oil fields Hilcorp is buying.

She says the North Slope is a completely different operating area than Cook Inlet, with a separate tax structure. But she says the company is excited by the opportunity.

“Long range we’re aiming to reduce operating costs and extend the field life,” Nelson said. “We certainly intend to increase capital investments in hopes of developing additional oil reserves from the Slope.”

Nelson says venturing on to the North Slope won’t detract from Hilcorp’s assets in Cook Inlet. Both BP and Hilcorp are hoping to close the deal by the end of the year, pending regulatory approval.

BP also announced today it will submit a new development plan for the Liberty field, which Hilcorp will own 50 percent of, by the end of 2014. The company suspended work on the offshore project two years ago because of financial and other concerns. The development is on a man-made gravel island four miles off Alaska’s shore.

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