BP has agreed to sell its entire oil and gas business in Alaska (United States) to Hilcorp for a total consideration of US$5.6bn. The transaction will include all of BP's upstream and midstream activities in Alaska, including BP Exploration, its upstream oil and gas company that holds interests in the giant Prudhoe Bay field, and BP Pipelines that owns interests in the Trans Alaska Pipeline System (TAPS). The sale is part of BP's strategic agenda that targets US$10bn of divestments in two years. The strategy is expected to strengthen the group's balance sheet and to help BP pursue new opportunities. Subject to state and federal regulatory approval, the transaction is expected to be completed in 2020.
BP has been active in Alaska since 1959, drilling for the Prudhoe Bay oil field in 1968 and producing first oil from this field in 1977. So far, the Prudhoe Bay oil field has produced more than 13 Gbl of oil and is estimated to have the potential to produce more than 1 Gbl. BP is the operator of the field with a 26% stake. BP also owns non-operating interests in the Milne Point and Point Thomson producing fields. In 2019, BP's net oil production in Alaska should average 74,000 bbl/d. In addition, BP holds non-operating interests in the Liberty project and exploration lease interests in the Arctic National Wildlife Refuge (ANWR). In the midstream sector, BP contributed to the construction of the Trans Alaska Pipeline in the mid-1970s; the group also owns interests in the Milne Point pipeline and the Point Thomson pipeline that will be sold as well.