BP exits Alaska but leaves behind long Arctic oil legacy: Fuel for Thought

Dwindling prospects, in its view at least, changes in corporate strategy, the failure to commercialize large stranded gas reserves and Alaska’s volatile politics and frequent changes in taxes all appear to have played a role in the company’s decision to sell its legacy North Slope holdings. BP left a long legacy in Alaska, spearheading the exploration in the early 1960s that ultimately led to the discovery of Prudhoe Bay, North America’s largest oilfield. As a Prudhoe Bay operator, BP became known for technology innovations, including drilling the first commercially successful horizontal production wells. That innovation set the stage for US shale oil and gas development using a combination of horizontal drilling and hydraulic fracturing. BP sold its Alaska holdings July 1 to Hilcorp Energy, a midsize Texas-based independent that owns and operates smaller Alaskan fields. Hilcorp has a reputation for purchasing mature, declining assets and aggressively redeveloping them. Hilcorp also acquired BP’s 50% share of Milne Point, another producing field on the slope, and Liberty, an undeveloped offshore deposit. The story of major companies like BP discovering and developing large finds and then selling them to lower-cost operators is an old one played out many times, even by BP in… continue reading

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