Sale of BP Alaska assets to Harvest/Hilcorp closes Dec. 18

Kristen Nelson

Petroleum News

Following conditional approval by the Regulatory Commission of Alaska on Dec. 14, on Dec. 18 BP and Harvest Alaska completed the acquisition by Harvest - a Hilcorp Energy affiliate - of BP’s midstream assets in Alaska, BP’s stake in the trans-Alaska oil pipeline and Valdez Marine Terminal and in Alyeska Pipeline Service Co. as well as BP’s share of the Milne Point and Point Thomson pipelines.

The upstream portion of the sale - BP’s share of the Prudhoe Bay, Milne Point and Point Thomson fields and related assets - closed June 30. Hilcorp took over as Prudhoe Bay operator on July 1. The company already operated Milne Point; Point Thomson is operated by ExxonMobil Production.

The $5.6 billion sale of BP’s Alaska assets to Hilcorp was announced in August 2019.

RCA’s decision on the midstream was conditional on some additional filings by Dec. 28 (see story in Dec. 20 issue). The companies provided the required filings electronically on Dec. 18, telling RCA the electronic filings would be followed by original paper copies upon their arrival in Alaska on or before the required Dec. 28 date.

In a Dec. 18 statement Harvest Midstream, the parent company of Harvest Alaska, said with the RCA decision Harvest acquires BP’s approximately 49% interest in the Trans-Alaska Pipeline System and 49% of Alyeska Pipeline Service Co.

“The completion of this acquisition is a critical milestone for Harvest,” said Jason Rebrook, chief executive officer of Harvest Midstream. “TAPS is an icon of American ingenuity and has a proven track record of safe and responsible operations with strong relationships in the communities it touches. We are committed to positively building upon this great legacy and we look forward to partnering with Alyeska, other TAPS owners and the State of Alaska for years to come.”

A Dec. 18 statement from BP said the company had completed the sale of its midstream Alaska business to Harvest Alaska, following the August 2019 announcement by the company that it would exit Alaska.

Dave Lawler, chairman and president of BP America, said: “BP deeply appreciates being a guest of Alaska and its Native communities for over six decades, and we thank the government of Alaska for its professionalism as we worked to finalize this sale. BP is a better company because of our time in Alaska.”

The additional filings RCA required from Harvest reflect that when filings were originally made with the commission Harvest Alaska was a wholly owned subsidiary of Hilcorp Alaska; it is now a wholly owned subsidiary of Harvest Midstream.

The required BP filings are related to DR&R obligations: BP retains those for the system as it existed at the time of the sale.

RCA required filings affirming that “BP Pipelines (Alaska) Inc. remains bound as a lessee under all right-of-way leases for which BP Pipelines (Alaska) Inc. is obligated to perform dismantlement, removal, and restoration,” and confirmation that BPPA would be invoiced by Alyeska for the full share of BP and Harvest DR&R. BP is to pay invoices and then bill Harvest for that company’s share. DR&R costs for the system as it existed prior to the sale remain the responsibility of BP; costs for work done after the sale are the responsibility of Harvest.

RCA said this requirement is a response to concerns expressed over Harvest’s financial ability to meet TAPS DR&R obligations.

- KRISTEN NELSON