RCA will delay decision on BP-Hilcorp deal; DNR finalizing work
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The Regulatory Commission of Alaska had set a Sept. 28 date for its decision on the midstream portion of Hilcorp’s acquisition of BP’s Alaska assets, but said Sept. 15 that it couldn’t make its decision without a decision from the commissioner of the Department of Natural Resources on transfer of state pipeline right-of-way leases associated with the pipeline transfers.
“The issues before us are very similar to those DNR is considering as to the right-of-way leases. Though we often consider and act on pipeline transfers before DNR acts on the underlying right-of-way leases, the scale of this acquisition makes it different from those more routine transfers.”
RCA said it wanted to see DNR’s consideration of the financial fitness of Harvest Alaska, Hilcorp’s midstream company, and also said it wanted to see the terms of any financial assurance agreements between DNR and Harvest Alaska because the terms of such an agreement “may affect our assessment of the financial ability of Harvest Alaska to acquire the pipeline interests it has applied to us to transfer.”
DNR spokesman Dan Saddler told PN is a Sept. 16 email that the department had hoped to wrap its analysis of the midstream portion of the sale the week of Sept. 7, but “final due diligence on the matter revealed two particular details concerning a couple pipelines involved in the transaction that we believed needed to be more clearly documented. That pushed our delivery date a bit past our target date.”
He said DNR is completing its final review and due diligence and anticipates transmitting its “fit, willing and able analysis” to RCA by close of business Sept. 17.
“The associated financial assurance agreements, and the financial analysis undertaken as part of the fit, willing and able analysis, will be retained as confidential in accordance with DNR’s statutes,” he said.
“We appreciate that RCA wants to make progress, and note that the commissioners have had the PSA in their hands for 12 months,” Saddler said. “We understand and share everyone’s desire to continue to keep making progress, but in transactions like this the details really matter and it is essential that we get them right the first time.”
BP and Hilcorp announced the sale last August and the upstream portion of the sale closed June 30.
- KRISTEN NELSON