State allows Hilcorp to keep finances from public view as it seeks to buy BP’s Alaska assets

After months of review, Alaska state regulators on Thursday granted confidentiality to Hilcorp Energy’s finances, removing a hurdle for the company as it seeks to buy BP Alaska’s pipeline assets as part of a $5.6 billion deal.

The Regulatory Commission of Alaska said the Houston, Texas-based company and its subsidiaries can keep their financial statements out of the public eye.

Hilcorp in August announced it intended to buy BP Alaska’s assets, including the company’s 49% stake in the 800-mile trans-Alaska pipeline, and interests in related pipelines.

The companies’ financial statements are declared to be “confidential as a matter of law,” the agency said in a 19-page order on Thursday.

More than 200 people have filed comments with the RCA, many concerned about Hilcorp’s request for privacy.

[Hilcorp’s $5.6 billion Alaska deal draws close look from Moody’s, Standard and Poor’s]

Skeptics have expressed concern that privately owned Hilcorp, a small company compared to BP, may not have the financial capabilities to handle unexpected events such as cleanup costs for a major oil spill. They also have said the transaction involving the trans-Alaska pipeline is so important to the state’s economy that the public needs a greater understanding of Hilcorp’s finances.

Hilcorp, known for buying and reviving aging oil and gas fields, has said it has provided unusually granular details of its operations at the agency’s request.

The oil company has also cautioned that disclosing that and other financial information would hurt its competitive advantage.

The five-member commission said its interpretation of state statute prevents it from releasing the documents because they are not required to be filed with the Federal Energy Regulatory Commission.

Commissioner Stephen McAlpine was the lone dissenting member. He said the companies did not originally state, as required, that they were seeking the confidentiality protections of the statute.

“With this in mind, I believe that airing these documents publicly and subjecting the entire transaction to intense debate far outweighs the petitioners’ interest in keeping them confidential,” McAlpine said in a two-page dissent.

[Hundreds of BP Alaska employees begin to move on, with a mix of feelings from ‘bittersweet’ to ‘ecstatic’]

“Instead, Hilcorp has invited an unnecessary public relations nightmare over what may come of the lifeblood of our state. Now public scrutiny may well be based on speculation as to what the documents may or may not say rather than a complete airing of the facts as they exist,” he said.

Hilcorp and BP filed for a transfer of the pipelines assets in September. The commission will decide on that larger issue by Sept. 28, the commission’s order said.

Philip Wight, an analyst with Alaska Public Interest Research Group, which has taken a lead in questioning the deal, said the commission’s order sets a “regressive precedent.”

He said the public interest group is considering legal action to reverse the commission’s decision.

“By ruling on a murky technicality, the commission failed to do its job to protect the public interest,” Wight said in a statement. “Alaskans are being denied the information we need to be good stewards of our resources.”