Providing coverage of Alaska and northern Canada's oil and gas industry
November 2019

Vol. 24, No.46 Week of November 17, 2019

Oil patch insider: FTC won’t stop BP Alaska sale to Hilcorp; Carl Portman to retire

Kay Cashman

Petroleum News

Unlike the BP-ARCO merger that closed in 2000 and was subject to oversight from the Securities and Exchange Commission, which did not allow BP to purchase ARCO’s Alaska assets, the proposed Hilcorp Alaska-BP Exploration Alaska deal has been reviewed by the Federal Trade Commission. The agency did not identify any antitrust or anticompetitive issues so will “not prevent” Hilcorp and BP from closing the $5.6 billion sale, Alaska Department of Natural Resources Commissioner Corri Feige told members of the House and Senate Resources committees in a Nov. 12 letter.

The Alaska Department of Law is currently conducting a similar review of the proposed transaction, she said in the letter. And “consistent with its obligation to manage the state’s resources for the maximum benefit of the people,” DNR is also doing “extensive due diligence and review” of the deal.

While it is “early in this process, significant resources within this agency and the Department of Law are currently deployed to ensure this robust oversight,” Feige said.

A partial list of DNR’s ongoing review activities includes: “(1) examining the purchase and sale agreement that effectuates the sale to understand how the obligations to the state are shared amongst the parties, including whether or not the original lessee remains liable for obligations accruing before the transfer; (2) contracting with an independent and highly respected economic consulting firm to rigorously examine Hilcorp’s ability to fulfill its obligations to the state under a set of stressful scenarios; (3) examining the existing financial assurances structure to determine what amendments will be required to properly manage the change in the state’s risk profile due to the sale; (4) conducting a thorough in-house financial analysis of several years of financial information; and (5) identifying and resolving any potential issues associated with the operation of acquired pipelines and infrastructure.”

In addition to DNR, other state agencies have a regulatory oversight role concerning the sale, Feige said, including but not limited to: the Alaska Oil and Gas Conservation Commission on issues regarding bonding and transfer of well ownership; the Department of Environmental Conservation on discharge prevention and contingency plan approvals and certificates of financial responsibility; the Regulatory Commission of Alaska concerning the transfer of common carrier pipeline assets; the Department of Revenue on possible tax implications; and the Department of Fish and Game regarding the possible transfer of permits.


RDC’s Carl Portman to retire in June

The Resource Development Council for Alaska will lose one of its most valuable employees at the end of June, Deputy Director Carl Portman.

Among many other duties, Portman has been responsible for the impressive list of presenters at the association's conference every November.

Set to retire June 30 after what will be 39 years with RDC, Portman said he will be leaving after the association’s annual meeting.

“I still plan to help out RDC on a volunteer basis, working on the conference and other … issues. I would also like to get involved in other organizations, including Food Bank of Alaska. It’s going to be a challenging adjustment, but I’m ready to give it a shot,” he said.


AG seeks to intervene in enviro lawsuit re. Hilcorp Cook Inlet seismic

The Alaska attorney general’s office filed a motion Nov. 13 to intervene in a lawsuit by Cook Inletkeeper and the Center for Biological Diversity that challenges the decision by the National Oceanic Atmospheric Administration, acting through the National Marine Fisheries Service, to issue incidental take regulations and letters of authorization okaying the unintentional take of marine mammals by Hilcorp Alaska that allow the company to conduct underwater seismic surveys on oil and gas leases in lower Cook Inlet.

Among other things, any delay in the development of the leases causes a “direct negative impact on Alaska’s tax revenues,” the AG’s motion says.

The case, in the U.S. District Court for the District of Alaska, is No. 3:19-cv-00238-SLC.


Dunleavy appoints Walsh, Reaves to board

Alaska Gov. Michael Dunleavy recently reappointed Tom Walsh, Anchorage, and appointed Dave Reaves, Wasilla, to Alaska’s Oil and Gas Competitiveness Review Board.

Walsh’s term runs until July 1, 2023, and Reaves until July 1, 2021, according to statement from the administration.

Created in 2013 by Senate Bill 21, the board was designed as a resource for the Alaska Legislature, and is tasked with establishing and maintaining salient data on oil and gas exploration, development and production, as well as providing lawmakers with factual information on the state’s fiscal system, labor pool and regulatory competitiveness,

The board’s first report was delivered to the Legislature in March 2015. It is in the process of updating that report and developing a score card that simplifies where Alaska stands compared to its competition around the world (see story in Oct. 27 issue of Petroleum News).


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