Providing coverage of Alaska and northern Canada's oil and gas industry
February 2020

Vol. 25, No.07 Week of February 16, 2020

RCA OKs sales agreement confidentiality

Requires supplemental filings by Feb. 18 on financial statement confidentiality from Harvest Alaska and BP Pipelines (Alaska)

Kristen Nelson

Petroleum News

The Regulatory Commission of Alaska said in a Feb. 11 order that it grants the petition for confidential treatment of the purchase and sale agreement in the sale by BP of its Alaska assets to Hilcorp.

RCA is hearing issues related to the sale of BP’s interest in the Milne Point Pipeline, BP’s interest in the PTE Pipeline, BP’s certificate of public convenience and necessity in the trans-Alaska oil pipeline and its interest in the Valdez Marine Terminal to Hilcorp Alaska’s pipeline subsidiary Harvest Alaska.

The commission said the applicants cited the negotiated nature of the purchase and sale agreement to justify confidential treatment and said the applicants also noted that the purchase and sale agreement covered more than the pipeline transactions, also including terms and conditions of the entire transaction under which BP is exiting Alaska.

“We agree with the applicants that disclosure of the terms of one transaction may weaken the disclosing party’s bargaining position with regard to other unrelated transactions, providing insight into the disclosing party’s negotiating strategy and economic valuations of interests in oil and gas properties,” RCA said. It also noted that no entity has requested access to the purchase and sale agreement.

More questions on financials

The parties also requested confidential treatment for financial statements.

RCA said it did not believe the parties had made as strong a case in requesting confidential treatment for financial statements.

While the commission has granted confidentiality to financial statements in other cases, in those cases the confidential treatment was not opposed by entities seeking public disclosure, which is the case here, RCA said. Requests that the financial statements be made public have been made on the grounds of assessing the ability of applicants to operate the trans-Alaska oil pipeline and the Valdez Marine Terminal, RCA said. And previous cases are for specific Alaska pipelines not the transfer of TAPS and the Valdez terminal, “an acquisition of assets on a much larger scale and that carries with it both greater performance expectations and increased potential financial risk should a catastrophic event occur,” RCA said.

RCA said it has also previously “required a more detailed showing of potential competitive harm to justify confidential treatment.”

It said the applicants have not provided “information in any level of detail and do not provide any demonstration of specific harm.”

RCA is requiring applicants to supplement petitions for confidential treatment of financial statements “with a more detailed discussion of the filed information and an explanation of the specific harm that would result from disclosure of components of the financial statements.”

RCA said it was also concerned about its legal ability to require disclosure of financial statements, and said it interprets state statute “to preclude us from disclosing to the general public documents related to the finances of a pipeline carrier subject to federal jurisdiction when the document is not required to be filed with a federal agency.” These pipelines are subject to federal jurisdiction, “so we would be limited in our ability to disclose this information should federal agencies not require the filing.”

RCA said the applicants should include in their supplemental filings “an explanation as to whether any of the submitted financial statements are required to be filed with a federal agency, and how and whether they relate to the finances or operations of the pipelines at issue.”

The commission is extending the time to rule on the petitions to March 12 and requiring filings by the applicants, Harvest Alaska and BP Pipelines (Alaska), of a detailed discussion of the filed information, explanation of specific harm from disclosure and an explanation of whether any of the financial statements are required to be filed with a federal agency by Feb. 18.


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