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(Alliance News) - BP PLC said late Tuesday it has agreed to sell all of its Alaskan operations to Hilcorp Alaska for USD5.6 billion.
The sale will include BP's entire upstream and midstream business in the state, including BP Exploration (Alaska) Inc, which owns all of BP's upstream oil and gas interests in the region, and BP Pipelines (Alaska) Inc's interest in the Trans Alaska Pipeline System.
Hilcorp Alaska is an affiliate of Houston-headquartered Hilcorp Energy Co.
Bob Dudley, BP chief executive, said: "Alaska has been instrumental in BP's growth and success for well over half a century and our work there has helped shape the careers of many throughout the company."
"However, we are steadily reshaping BP and today we have other opportunities, both in the US and around the world, that are more closely aligned with our long-term strategy and more competitive for our investment. This transaction also underpins our two-year USD10 billion divestment programme," he added.
Of the USD5.6 billion consideration, USD4.0 billion is payable "near-term" and USD1.6 billion through an earnout thereafter. Subject to state and federal regulatory approval, the sale is expected to complete in 2020.
BP began working in Alaska in 1959, and its net production from the state in 2019 is expected to average almost 74,000 barrels a day. Hilcorp, meanwhile, has been operating in Alaska since 2012 and is the largest private oil and gas operator in the state, currently producing in excess of 75,000 gross barrels of oil equivalent a day.
BP's Dudley added: "Our exit from Alaska does not in any way diminish BP's commitment to America. We remain very bullish on the US energy sector. In just the last three years we have invested more than USD20 billion in the US and we will continue to look at further investment opportunities here."
