British oil giant BP said Tuesday it will sell all of its Alaska operations for $5.6 billion, exiting the state after 60 years to help meet divestment goals. The local firm Hilcorp Alaska will acquire the BP assets, including operations in the mammoth Prudhoe Bay oilfield, BP said in a statement.
The sale, which is due to be completed next year, is part of BP’s $10 billion divestment program to help the company shore up its balance sheet. In June, the company said it would sell assets in Egypt’s Gulf of Suez to a Dubai firm for an undisclosed sum.
Projects elsewhere in the world are now better suited to BP’s long-term strategy and were thus “more competitive for our investment,” BP chief Bob Dudley said in the statement. “Our exit from Alaska does not in any way diminish BP’s commitment to America.” The sale to Hilcorp involves a $4 billion payment up front, with the remainder coming in earnout payments over time.
BP’s Alaska production is expected to average 74,000 barrels per day in 2019, according to the company. The British oil major first entered oil-rich Alaska in 1959 – the same year it officially became a US state – and helped construct the 1,300-kilometre Trans-Alaska Pipeline. The company last month posted a 35 percent drop in quarterly profits due to falling oil prices.