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Oil Patch Insider: With collapse of Argentina sale, is BP’s Alaska aim now clearer?
In the summer of 2010, speculation in the British press and elsewhere was that BP was looking to sell its stake in Prudhoe Bay and other Alaska oil fields as part of an effort to raise money following the costly the Deepwater Horizon disaster.
That didn’t happen, and BP never clarified publicly the status of its Alaska properties.
Now, some signals suggest that perhaps BP has decided to keep Alaska in its global portfolio.
BP announced Nov. 7 that a $7.06 billion cash deal to sell its 60 percent stake in an Argentina-based oil and gas producer, Pan American Energy, to minority owner Bridas Corp. and China’s Cnooc had fallen through. As a result, BP was obliged to repay a $3.53 billion deposit.
Pan American’s production as of 2010 was 241,000 barrels of oil equivalent per day.
“BP is happy to return to long term ownership of these valuable assets, given the considerable improvement in its own financial strength and circumstances,” BP said in a press release.
BP went on to say that “under different circumstances from those at present,” the company in November 2010 had agreed to sell its interest in Pan American “as an early element of its divestment program to strengthen its balance sheet.”
The Wall Street Journal on Nov. 6 reported that BP’s chief executive, Bob Dudley, had noted in an Oct. 25 phone call with financial analysts that oil prices were lower when the Pan American deal was made, and it was “a time when we actually needed to make some divestments.”
Since June 2010, excluding the Pan American deal, BP has compiled more than $19 billion in agreed asset sales, the company said in its Nov. 7 press release. And at the end of September, BP held $18 billion in cash.
BP’s Alaska ‘commitment’ Given the company’s stated improvement in financial strength, is Alaska now off the sale block — assuming it was ever on it?
Steve Rinehart, BP’s Alaska spokesman, told Petroleum News: “Indeed there was a fair amount of speculation on this topic, back in 2010. At the time, I was careful to point out we do not comment on market speculation. That is a standing company position.”
He referred to a new printing of the company’s brochure, “BP in Alaska,” which carries a message from John Mingé, president of BP Exploration (Alaska) Inc.
“BP has been in business in Alaska since before statehood and we have been producing on the North Slope for more than 33 years,” the message begins. “Many things have changed over that time, but one thing that has not is BP’s commitment to a safe, reliable and sustainable business in Alaska.”
Mingé goes on to talk about how BP intends to go after the Slope’s remaining light oil deposits, as well as heavy and viscous oil and natural gas.
Divestment to continue Of course, none of this would appear to guarantee that BP will keep its Alaska properties.
The Nov. 7 press release on the terminated Pan American sale concludes with this:
“In October 2011, BP announced that it intended to extend its divestment program to $45 billion by the end of 2013. BP’s current divestment program is focused on the sale of non-strategic assets and not driven by a requirement to raise cash. As such, BP does not currently plan to divest additional assets to offset proceeds which would have been received from the PAE transaction.”
BP operates 15 North Slope oil fields, including giant Prudhoe Bay. The company’s ownership stake in Prudhoe is 26 percent.
—Wesley Loy
New Arctic investment fund outed, but Guggenheim downplays report Is Guggenheim Partners creating a new investment fund to plow potentially billions of dollars into infrastructure or other opportunities in the thawing Arctic?
That was the word coming out of a Nov. 10-12 forum of the Juneau World Affairs Council.
Headquartered in New York and Chicago, Guggenheim Partners is described on its website as a privately held global financial services firm with more than $125 billion in assets under management.
Alice Rogoff, publisher of an Anchorage online news outlet called Alaska Dispatch, “revealed” during the forum that Guggenheim Partners was developing an Arctic investment fund and that it was “huge news,” the Juneau Empire reported.
Rogoff surely knows the financial world as she’s married to David M. Rubenstein, a co-founder and managing director of The Carlyle Group, a global private investment firm.
Petroleum News contacted two spokesmen for Guggenheim Partners. While they allowed that an Arctic investment fund might be under consideration, they stressed that nothing has been decided and no details have been worked out.
Rogoff said in a Nov. 17 email to Petroleum News:
“I want to clarify a statement I made regarding Guggenheim Partners and a potential Arctic investment Fund. As far as I know, Guggenheim is only studying the possibility of a potential fund.
Due to my words, though, which were an overstatement, there have been some published reports that went further. While only a few of the comments I made were reported, the amount of attention they generated does indicate to me that there is strong interest in the growing economies of the Arctic region.
(And that is all I intend to say, since I am not affiliated with Guggenheim and once again, do not speak for them).”
—Wesley Loy
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