BP Plc’s decision to sell its Alaska business to privately owned Hilcorp Energy Co. for $5.6 billion not only will herald a major change for the state’s oil industry but also illustrates a growing trend between the majors and private E&Ps.

“BP was a pioneer in Alaskan drilling and one of the key players in building the Alaskan oil industry, including drilling the confirmation well for the massive Prudhoe Bay field in the 1960s and participating in the Trans Alaska Pipeline in the 1970s,” Enverus’ senior M&A analyst, Andrew Dittmar, commented. “Their exit and replacement by Hilcorp marks a changing of the guard for the Alaskan petroleum industry.”

BP has been scaling back its exposure to Alaska through a series of asset sales since 2014—including to Hilcorp previously. The latest deal thus represents a continuation of both companies’ strategies, with one taking on assets as the other has shed them. Nonetheless, this deal is especially significant, representing an international major’s exit from the state after 60 years and resulting in the handover of operatorship in the giant Prudhoe Bay oil field.

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