Hilcorp, BP want many of their answers to state regulators’ questions kept confidential

Hilcorp’s Innovation drilling rig on the North Slope. (Photo courtesy of Hilcorp)

As oil and gas company BP presses ahead with the sale of its Alaska business to privately-held Hilcorp, questions loom around how low oil prices are impacting the deal.

On Monday, the companies released answers to a state agency that’s scrutinizing a key piece of the transaction, but with a catch: The companies and their affiliates want to keep much of the information out of public view, including whether plummeting oil prices have affected Hilcorp’s ability to borrow money to pay the $5.6 billion price tag.

That answer and others are redacted in the public version of the companies’ response to questions posed by the Regulatory Commission of Alaska. The commission received the responses in full, but the companies are asking it to keep the answers confidential that they have blacked out in the public version of the 1,377-page document.

(Screenshot of a section from the 1,377-page document that BP and Hilcorp affiliates filed with the RCA on Monday, May 4, 2020.)

The document is the latest development in the commission’s months-long review of Hilcorp’s plan to purchase BP’s entire Alaska business. It’s one of the largest oil industry deals in state history, and would launch Hilcorp into the position of second-largest oil producer in Alaska.

The sale includes BP’s stake in the massive Prudhoe Bay oil field and the trans-Alaska pipeline. The commission is reviewing the slice of the deal involving pipeline assets.

The information the companies want to keep confidential in the review ranges from risk assessments to insurance policies to minutes from pipeline operator meetings. They also don’t want several pipeline studies to be made public, or a copy of a revised sales agreement that the companies announced last week, according a separate, 39-page petition for confidential treatment filed with the commission on Monday.

The companies argue that the information includes trade secrets, and releasing it publicly would harm their businesses, and provide their competitors with an unfair advantage. Hilcorp and its affiliates are privately-held, the companies’ petition says, and “forcing public disclosure of this otherwise private information” would negate their competitive advantages.

“Such a decision would essentially saddle the Hilcorp Entities with the disadvantages of being a publicly-held company without conveying any of the advantages,” the petition says.

But some, including Philip Wight, a policy analyst for the Alaska Public Interest Research Group, are pushing back against the companies’ confidentiality request. He described it as “alarming.” The consumer advocacy organization has argued that Hilcorp must publicly disclose its finances to prove it has the money to operate the assets it wants to buy, and to respond to any costly oil spills.

“What these requests for confidentiality reveal is that Hilcorp really has no desire to be open and honest with the Alaskan people, and they really have no desire for this to be a public input process,” Wight said. “They really just want to do things behind closed doors.”

Wight said the public deserves to have the information, so it can weigh in on the sale, “in order to protect our environment and to make sure that we’re getting a good deal for the sale and monetization of our resources.”

BP and Hilcorp declined to comment outside of the RCA filings.

The companies’ public answers filed Monday include information on reportable oil spills and some information on prior pipeline repairs. The commission will ultimately decide whether the information currently redacted from the public version can stay confidential.

The commission has already approved prior requests from BP and Hilcorp to keep certain financial statements confidential during its review process. The City of Valdez is currently challenging the commission’s decision in court.

BP confirmed last week that the sale of its entire Alaska business to Hilcorp is still on, but under revised financial terms that reflect the turmoil in the oil industry amid a pandemic-driven crash in demand for fuel.

BP said it expects to complete the sale in June. If the commission’s process takes longer, it said, it could close part of the deal this summer, and the pipeline portion later on.

The Alaska Department of Natural Resources also continues to review a portion of the deal.

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