BP will sell its entire stake in the Endicott and Northstar fields and 50% interests in both the Liberty and the Milne Point fields. The deal also includes all of BP’s interests in the oil and gas pipelines associated with the fields.
No financial terms were disclosed.
BP owns a full or near-full 100% stake in all the fields involved in the sale except for Endicott, which is located about three miles offshore. ExxonMobil holds 21% of Endicott and Chevron owns 11%.
BP said the deal with Hilcorp “will help build a more competitive and sustainable business” for the supermajor in Alaska.
“It will allow us to play to two of our great strengths – managing giant fields and gas value chains,” said BP Upstream chief executive Lamar McKay.
For Hilcorp, which will operate each of the fields besides Liberty, the deal increases an asset base in Alaska that currently includes operations and production in Cook Inlet.
The sold assets represent around 19,700 barrels of oil equivalent per day of net production, or about 15% of BP’s total net production on the North Slope.
BP will continue to operate the challenging Liberty field, where work was suspended in 2012 due to massive cost overruns. The company also said it expects to submit a development plan for the field by the end of this year.
Liberty, discovered in 1997, holds estimated reserves of 100 million barrels of recoverable oil but has yet to produce any significant hydrocarbons.
McKay said BP will now concentrate on “continuing development and production from the giant Prudhoe Bay field and working to advance the future opportunity of Alaska LNG”.
At Prudhoe Bay, BP plans to add a pair of drilling rigs – one next year and another in 2016. It plans to spend an incremental $1 billion there over the next five years.
BP said the nearly 250 employees associated with the sold assets will be informed of their future “as soon as possible”. The majority are expected to be offered positions with Hilcorp, BP said.
The sale is expected to close by the end of the year.