Parnell meets with top BP execs in London

Shell, Eni CEOs next on European trip; main topics with BP were gas pipeline and Asia market, oil tax cuts, infrastructure integrity

Kay Cashman

Petroleum News

Gov. Sean Parnell told Petroleum News in a phone interview from London that he had a lengthy meeting on Nov. 2 with BP Chief Executive Bob Dudley, their conversation centering on three major issues of concern to the governor — getting a natural gas pipeline from the North Slope built soon, how Alaskans might benefit if oil taxes are cut, and the integrity of North Slope infrastructure.

Also attending the meeting were BP Exploration Alaska President John Minge and Bob Fryar, the executive vice president on BP’s senior management team who is responsible for safe and compliant BP exploration and production operations and the stewardship of resources, including natural gas, around the world.

On a natural gas pipeline, Parnell said he thought it important to repeat what he had said in an Oct. 27 speech at the Alaska Oil and Gas Association luncheon in Anchorage, which was that if the best long-term gas market had truly shifted from the Lower 48 to Asia, he wanted the major holders of proven North Slope natural gas reserves — ExxonMobil, ConocoPhillips and BP — to consider liquefied natural gas exports to Asia.

TransCanada, the licensee with the state of Alaska under the Alaska Gasline Inducement Act, has always said it will be the gas producers who decide on the route of the gas pipeline.

Parnell also wanted to “signal that I am flexible about how to commercialize Alaska gas as long as it is in Alaska’s interest … and that I want to see BP get better aligned with our licensee on the project.”

The governor said a face-to-face meeting with BP’s top executive was very important.

“I wanted to speak directly with Dudley. I wanted to be sure he knew what Alaska’s concerns were and that I was also willing to work to bring investment to Alaska.”

Parnell told The Associated Press that he left the meeting believing the two held a similar view that the region’s market was worth investigating.

TransCanada is working with ExxonMobil to advance a natural gas pipeline project but it has not yet announced any agreements with shippers.

On Nov. 2, the president and chief executive of TransCanada, Russell K. Girling, said in a quarterly financial conference call that the continued focus of the Alaska Pipeline Project remains the Lower 48. But he said it is a market-driven project, “and we’ll move the gas to wherever the market decides it wants to move the gas to.”

A BP spokesman in Alaska, Steve Rinehart, said the company has studied and will continue to study the potential for liquefied natural gas. He said the goal is getting North Slope gas to market.

Parnell is in the midst of his first state-sponsored trip overseas, what he’s calling an “investment mission.” It is the latest in a series of trips that Parnell or other members of his administration have taken in an effort to tout Alaska’s development and investment potential.

Parnell still plans to meet with the CEOs of two other energy firms, Royal Dutch Shell, Europe’s largest oil company, and Eni SpA.

He began his trip in the United Kingdom, where in addition to meeting with Dudley, he also promoted one of the state’s top exports, seafood.

Parnell said he was “professionally and graciously” received by Dudley, who Parnell said he also pressed to be more specific on what kind of benefits Alaskans could see if oil production taxes were cut.

Minge said earlier this year that he supported the $5 billion investments that a ConocoPhillips executive envisioned would occur if Alaska’s oil production tax regime were changed, and said he saw that as a start “in terms of what is possible.”

Minge’s comments came as Parnell’s tax cut bill stalled in the Senate, with leading lawmakers saying they didn’t have the information they needed to make a sound policy call and some seeking firm commitments from energy companies for what Alaska would see in return if taxes were cut.

“I think that number they put out there, the $5 billion number, of new investment or additional investment, I think that’s a bare minimum from one company,” Parnell said.

While other companies would benefit from tax changes, too, “I’m in this to assure that Alaskans see more investment and see more jobs.”

Parnell plans to revive the tax issue when the Legislature convenes in January.

—Becky Bohrer of the Associated Press contributed to this article.