Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you a link to reset your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you a link to reset password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list

Hilcorp-BP $5.6 billion Alaska deal on track despite low oil prices: state commissioner

Commodities | Agriculture | Grains | Energy | Oil | Crude Oil | Refined Products | Gasoline | Shipping | Tankers

Market Movers Americas, Sep 14-18: Naphtha arbitrage opens, USGC diesel at six-month high


Platts Market Data – Oil

Oil | Crude Oil

The Growing Influence Of US Crude – A Global Perspective Webinar

Natural Gas | Natural Gas (North American) | Oil | Crude Oil | Refined Products

Western US Gulf of Mexico evacuations beginning ahead of tropical storm

Hilcorp-BP $5.6 billion Alaska deal on track despite low oil prices: state commissioner


Commissioner spoke this week with BP, Hicorp

Says BP makes 'deals in all kinds of market conditions'

Analyst questions deal at current oil prices

Anchorage — BP and Hilcorp say the $5.6 billion deal for Hilcorp to buy BP's Alaska assets is still on, despite the dismal oil market, the state commissioner of natural resources said Wednesday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

"We're hearing the deal is still on," Commissioner Corri Feige said in an interview. "I spoke with BP as recently as Monday, as well as with Hilcorp."

Feige said she expected the deal to close later than the companies had wanted, and they are now speaking of completing the transaction later this year rather than mid-year. BP said as much in a briefing to analysts in March.

It's also possible terms of the deal could change, including BP having to provide more guarantees. Feige said she has not seen details of the sale plan but has been told there are contingencies in the deal for declines in oil markets.

"BP told me they do deals in all kinds of market conditions, when prices are high, when they're low and at every point in between," Feige said. "We're told that at this point there doesn't seem to be anything that will derail this from their perspective."

Feige is the state official who must sign off on the upstream parts of the purchase, mainly BPs' holdings in the Prudhoe Bay Field.

Another state agency, the Regulatory Commission of Alaska, must approve Hilcorp's purchase of BP's midstream Alaska assets, mainly the company's share of the Trans Alaska Pipeline System.

Hilcorp must show it is financially capable of handling operations and liability for both the upstream and midstream. The state Regulatory Commission has asked Hilcorp to provide more information on its finances amid the current oil market situation.The commission asked that the information be provided by May 4.


Feige said the approvals by the state resources department and the regulatory commission are separate, but that the commission's concern over finances focuses mainly on liability for oil spills and the ultimate removal of the pipeline and restoration of right of way, and that BP has already said it will provide these guarantees. One unresolved question is whether the guarantees will be from BP's North American subsidiary, BP North America, or the parent company, she said.

Despite the companies' verbal assurances, Feige said she is keeping a close eye on key personnel movements between BP and Hilcorp as signs that things are really on track. She will particularly be watching for a planned transfer of BP employees out of Alaska set for May, she said. BP has also told her that some of the transfer may happen earlier as part of the company's moves to safeguard employees from exposure to the coronavirus.

Hilcorp is privately held and its finances are private, but the company has said it plans to finance much of the transaction with debt. However, in the current market lenders will have to take a very long-term view of the deal, said Parker Fawcett, S&P Global Platts analyst for North America production and supply.

"This is a huge deal and it only makes sense in the North Slope environment if oil prices are over $55-$65/b," Fawcett said. "I don't believe it makes sense at $40 to $50/b."

Alaska North Slope crude oil has been selling at below $20/b in recent days. With an average cost of $8-$9/b to move oil from the North Slope to US West Coast, many of the North Slope fields may now running at their break-even cash operating costs, Fawcett said.

Despite that, Fawcett believes the companies are taking the long view, that oil markets will right themselves and that the transaction will happen.

Neither BP nor Hilcorp would comment Wednesday.