Energy giant BP on Tuesday closed the sale of assets related to four oil fields it operates on Alaska's North Slope, in a deal with Hilcorp Energy previously announced at up to $1.5 billion.
"With the approval of state and federal regulators, Hilcorp is now the operator of the Milne Point, Endicott and the Northstar oil fields and associated pipelines," said Janet Weiss, president of BP Alaska, in a presentation to the Resource Development Council in Anchorage on Wednesday.
Houston-based Hilcorp has a history of increasing production at existing fields and expects to do so at the Milne Point field, where BP retained 50 percent ownership, said Weiss. "Hilcorp has indicated to us plans to increase activity and investment in Milne Point" -- as the company has already done after acquiring aging oil and natural gas fields in Cook Inlet -- said Weiss.
The deal with the relatively small independent included the sale of all BP's interest in the Northstar and Endicott fields.
The three fields recently brought BP a total of about 20,000 net barrels of oil daily, representing about 15 percent of overall BP production.
BP also retained 50 percent of the offshore Liberty oil field, a challenging play where BP has not yet achieved production.
The deal with Hilcorp was announced in the spring.
A week ago, BP and Hilcorp filed a request with federal regulators to make Hilcorp the operator of the field, Weiss said. BP will work with Hilcorp to submit a development and production plan at that field by the end of this year.
Weiss said 200 people who work for BP and support the sold assets either moved to Hilcorp with no break in employment or chose early retirement. Another 275 people will no longer be working with BP because the sale reduced the company's footprint in Alaska, Weiss said.
The changes will allow BP to remain competitive and continue to attract capital, Weiss said, as well as focus on increasing production in the giant Prudhoe Bay oil field in the Arctic and developing the Alaska LNG project, in which the state is a partner with BP and other energy companies.