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Transaction oversight
Dunleavy appoints committee to give state representation in BP sale to Hilcorp Kristen Nelson Petroleum News
Alaska Gov. Mike Dunleavy has appointed the Governor’s Oversight Committee on the BP-Hilcorp Transaction. In a Dec. 27 press release the governor’s office said the purpose of the oversight committee is to make sure the state and its people are represented as the transaction moves forward. The committee will provide Dunleavy with oversight and updates on the transaction as it moves ahead.
“This transaction represents a new era for Alaska’s North Slope, so it’s important that we fully understand the benefits and any potential impacts on Alaskans and the state’s most important industry in terms of revenue and jobs,” Dunleavy said. “Oversight, review and approval of the transaction are the state’s responsibility and we will ensure it is done to the highest possible standards.”
Unlike BP-ARCO merger In the Dec. 27 memorandum establishing the oversight committee Dunleavy noted that while the BP-ARCO merger that closed in 2000 was subject to Securities and Exchange Commission oversight, the BP-Hilcorp transaction was reviewed by the Federal Trade Commission which identified no antitrust or anticompetitive issues. “As a result,” the governor said, “the Transaction review and approval is unequivocally the State’s responsibility.”
The purpose of the oversight committee is “to ensure the Transaction receives a fair and thorough vetting, and to inform the Governor’s Office and public of the Transaction proceedings.”
The committee includes the commissioner or designee of the Department of Natural Resources as chair. Other departments represented by the commissioner or designee are: Environmental Conservation; Fish & Game; Labor and Workforce Development; Commerce, Commerce, and Economic Development; and Revenue. Also included are the attorney general or designee of the Department of Law and the governor’s office director of policy and communications.
Responsibilities of the oversight committee summarized in the press release are to advise the governor on whether statutory and regulatory requirements are being satisfied, inform him on comments from the public and the Legislature, and any potential impacts on the state’s workforce.
More information on the oversight committee’s members and schedule will be announced in the near future, the governor’s office said in the press release.
Concerns expressed The Legislature’s House and Senate Resource committees heard an overview of the state’s evaluation of the transaction Dec. 16 from DNR Commissioner Corri Feige (see story in Dec. 22 issue of Petroleum News).
Questions asked by legislators covered a wide range of issues - from guarantees for DR&R (dismantlement, removal and restoration), to whether the state was considering a public charter or document to issues of workplace safety and philanthropy.
Legislators indicated that they would be holding additional hearings on the transaction and expected to hear from the companies as well as from agencies not represented Dec. 16.
DNR’s focus is on transfer of the leases.
Another big part of the transaction is BP’s interest in regulated pipelines, from those on the North Slope to the trans-Alaska oil pipeline and related facilities in Valdez.
The Regulatory Commission of Alaska is responsible for that transfer and it has opened a docket and taken comments, including requests for a public hearing on the transfer and questions about the fitness and ability of Harvest, the Hilcorp subsidiary which handles pipelines, to operate TAPS (see story in Dec. 29 issue of Petroleum News).
BP and Harvest responded to those comments, noting that some of the issues raised do not fall under RCA’s jurisdiction and arguing that the commission does not typically hold hearings on transfers of pipeline ownership. Comments to RCA also argued that financial data should be publicly available. There is financial data available for BP which is a publicly traded company; Hilcorp, a privately held company, does not make its financial data publicly available.
This issue was also addressed in the legislative hearing and DNR pointed out that it has access to confidential financial data for use in its evaluation; the same is true for RCA.
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