BP Sells All Its Assets In Alaska For $5bn, To Pull Out Completely From The Region

Following its decision to sell off its entire remaining business in Alaska to a private oil and gas firm, British Petroleum no longer will have any oil and gas operations in this North American region.

All of the assets and business interests of BP in this state in the northern most region of the United States will be bought by Hilcorp in a deal that is valued at $5.6 billion. BP has in recent times been under pressure from various environmental groups to halt its drilling and other operations in the region. However BP confirmed that this decision is not in any way connected to those pressures form environmental groups.

“We have other opportunities that are more closely aligned with our long-term strategy,” BP’s chief executive said.

The company clarified that this sale of its assets and interest in Alaska is a part of its larger strategy of generating funds of $10 billion in the next two years by way of sale of assets tio help the company to further strengthen its balance sheet.

Further, there were financial impediments too in drilling in Alaska because of the higher costs of operations there due to the extreme cold and remoteness of a number of the drilling sites in the region.

Hilcorp had the ability to “maximise its [the business’s] value for the State of Alaska”, said BP’s chief executive Bob Dudley. The money that would be generated from the sale of the Alaska assets would aloe BP to “pursue new advantaged opportunities,” Dudley added.

BP has been active in Alaska since 1959 and the company played a crucial role in the construction of the 800-mile Trans Alaska Pipeline in the mid-1970s.

The most prolific oil field in US history belongs to the region – the Prudhoe Bay oilfield in the state, in which there is a 26 per cent stake of BP. That oil field has drilled out more than 13 billion barrels of oil and according to industry experts, the oil field more than one billion more barrels of oil can be extracted from there.

There were currently about 1,600 employees who were currently directly working on the Alaska operation of the company, BP said. It added that it was “committed to providing clarity about their future as soon as possible as part of the transition process with Hilcorp.”

The company is by no means reducing the importance of the United States as country where it would do further drilling despite its decision to sell its assets in Alaska, Dudley said. “We remain very bullish on the US energy sector… and we will continue to look at further investment opportunities here,” he said.

(Adapted from BBC.com)



Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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