Sometimes "life" things happen that are out of your control, but turn out to be a blessing in disguise down the road. I'm hoping this is one of them. It's been an emotional time for us as we figure out what the future might look like. Working for a different company from Ross and being a working mom are two things I'll potentially need to navigate.
Here is the public announcement:
Subject: READ: Hilcorp Transaction - North Assets
Team Alaska -
BP is committed to maintaining a safe and compliant business that is sustainable and aligned with our corporate strategy; for Alaska, our part in the strategy is big fields and gas value chains. With that commitment, today we are announcing that BP has agreed to sell our interests in four North Slope Alaska oilfields to Hilcorp.
The sale includes all of BP’s interest in Endicott, the Endicott Pipeline, Northstar and the Northstar Pipelines; and 50 percent interest in Milne Point, the Milne Point Pipelines and the Liberty field. To put it in perspective, it represents less than 15 percent of BP’s net production on the North Slope.
As a result of the sale and subject to approval, Hilcorp is expected to become the operator of the Endicott, Northstar and Milne Point oilfields and their associated pipelines and infrastructure. BP will retain a 50 percent interest in both the Milne Point and Liberty fields and expects to submit a development plan for Liberty by the end of 2014.
Our goal is to focus as operator of the giant Prudhoe Bay oilfield, increasing production adding activity and progressing the Alaska LNG opportunity, while increasing and accelerating activity at Milne Point through introduction of a new Alaska North Slope partner. This transaction brings a new investor and a new operator to the North Slope with a strong track record of unlocking production and resources from mature oil fields similar to Endicott and Northstar.
Our priorities are to continue to ensure safe, reliable and efficient North Slope operations and to provide the approximately 250 employees associated with these assets clarity about their future as soon as possible. We anticipate that the majority of our employees at or supporting Milne Point, Endicott and Northstar will be given job offers by Hilcorp with no break in employment. Those who don’t receive an offer will have the opportunity to seek roles within BP. All employees will be treated with fairness, dignity, and respect.
As operator of the Endicott, Northstar and Milne Point oilfields as well as the associated pipeline infrastructure, Hilcorp, already active in Alaska’s Cook Inlet, will become a new operator on the North Slope. BP remains the operator until the transaction is approved by State of Alaska and federal regulators, which is expected by year end.
I realize this news brings uncertainty and will impact many of you on a personal level. Both companies are committed to ensuring a smooth process for all affected employees. All employees on shift this week will have the opportunity to meet with leadership and know your status. We will also ensure that you understand the way forward. Employees not on shift will be contacted at home by their supervisor. Supervisors will also be available to talk to employees when they return to work.
Our intent is to be able to increase and accelerate production activities at both the Prudhoe Bay and Milne Point oilfields, as well as sell our interests in Endicott and Northstar to an operator that has a strong track record of energizing mature fields. This transaction allows us to focus on giant fields like Prudhoe Bay where we are significantly increasing activity and investment and, world-scale projects like LNG. It also brings a new investor and a new operator to the North Slope with a focus on unlocking production and resources from mature oil fields.
Our respective strengths put us on a path to a future with more activity and more investment on the North Slope. Hilcorp has demonstrated its abilities in Cook Inlet, where it has increased oil production by 36% (9,700 barrels per day) since taking over Alaska assets in January 2012. We are after a competitive and sustainable business which we know leads to a stronger industry and economy for Alaska over the long-term.
We are committed to submitting the Liberty Development and Production Plan to federal regulators by the end of 2014, and we are committed to advancing this challenging project along with Hilcorp. Recognizing the achievements and the excellent work that has been done to bring Endicott and Northstar to where they are today, we are excited about putting these assets in the capable hands of Hilcorp as well.
Thank you for maintaining your relentless focus and commitment to safe and reliable operations on Alaska’s North Slope. I know many of you will have questions in the coming days and weeks, and the Alaska Leadership Team is committed to answering those questions and making the transition as smooth as possible. The lines of communication are open, and we will continue to update you on a regular basis.
With high regard-
Janet
Good thing little missy helps keeps things in perspective!
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