Among other things, those assets include BP's interests in the Prudhoe Bay field and the Trans Alaska Pipeline System, or TAPS, and the Arctic National Wildlife Refuge 1002 area.

The sale encompasses BP's entire upstream and midstream business in the state, including BP Exploration (Alaska) Inc.

Under the terms of the agreement, Hilcorp will pay $4.0 billion in the near-term and "$1.6 billion through an earnout thereafter."

The deal forms a significant part of BP's plan to divest $10 billion of assets over 2019 and 2020.

BP's net oil production from Alaska in 2019 is expected to average almost 74,000 barrels a day.

BP operates Prudhoe Bay, with a working interest of 26%, and holds non-operating interests in the producing Milne Point and Point Thomson fields. It also holds non-operating interests in the Liberty project and exploration lease interests in the ANWR 1002 area.

In addition to shares in TAPS, BP is divesting its midstream interests in the Milne Point Pipeline and the Point Thomson Pipeline.

Approximately 1,600 employees are currently associated with BP's Alaska business and BP is committed to providing clarity about their future as soon as possible as part of the transition process with Hilcorp.

Bob Dudley, BP group chief executive, was quoted in the company's Aug. 27 press release as saying, "we are steadily reshaping BP and today we have other opportunities, both in the U.S. and around the world, that are more closely aligned with our long-term strategy and more competitive for our investment. … Our exit from Alaska does not in any way diminish BP's commitment to America. We remain very bullish on the U.S. energy sector. In just the last three years we have invested more than $20 billion in the U.S. and we will continue to look at further investment opportunities here."

- KAY CASHMAN

See story in Sept. 1 issue, available online Friday, Aug. 30 at www.PetroleumNews.com