|
BP-Hilcorp deal: many issues remain
RCA answers questions on information it has requested; PWSRCAC, AKPIRG urge financial data; Valdez appeals commission decision Kristen Nelson Petroleum News
The Regulatory Commission of Alaska has set a Sept. 28 date for its decision on BP’s sale to Hilcorp of its pipeline assets. It has asked BP and Harvest, Hilcorp’s midstream subsidiary, for information on issues including dismantling, removal and restoration studies, DR&R.
The Alaska Public Interest Research Group and the Prince William Sound Regional Citizens’ Advisory Council have filed requests related to financial data submitted by Hilcorp.
And the City of Valdez has appealed to Alaska Superior Court the commission’s decision not to make financial data from the companies public.
Information requested The commission’s request for additional information, issued April 2, came as it turned its attention to whether the proposed acquisitions met its statutory standards and are in the best interest of the public.
The companies subsequently asked for clarification on the information requested.
The commission asked for operational risk assessments for the trans-Alaska, Point Thomson and Milne Point pipelines.
In a response, the companies said there were a very large number of these assessments, going down almost to the individual employee level on a daily basis, and said that is probably not the level of detail the commission was seeking.
They proposed “facility, pump station, mainline and fuel gas line process hazard analyses” for the past 10 years.
The commission agreed, adding: “Please ensure that process hazard analyses for the terminal is included,” and also asked for minutes of TAPS owners committee meetings for the past 5 years.
The commission requested information on every reportable spill since inception. The owners proposed the reporting be limited to that defined by the U.S. Department of Transportation/Pipeline and Hazardous Materials Safety Administration and the American Petroleum Institute, generally 5 gallons of crude to land or containment or any amount to water from portions of pipelines’ operations regulated by PHMSA.
The commission accepted that level of reporting.
RCA requested all DR&R studies and updates for TAPS and the Point Thomson and Milne Point pipelines.
The companies proposed that they provide “the most recent study and all updates of each pipeline rather than attempt to locate old studies that have been superseded.”
The commission did not agree to that proposal, saying it “requires all DR&R studies and updates.”
Financial statements The Alaska Public Interest Research Group and the Prince William Sound Regional Citizens’ Advisory Council both requested that RCA require Hilcorp to submit updated financial statements reflecting the company’s financial status in the current investment environment.
“Much has changed since Hilcorp submitted its initial financial statements,” PWSRCAC said, the magnitude of which might affect Hilcorp’s financial fitness.
“Based upon Hilcorp’s own public statements, we know that the company is already heavily leveraged” and national media outlets have reported that prospective lenders have asked Hilcorp’s owner to pledge some of his own money.
Since the commission won’t conclude its inquiries until September, the AKPIRG said, financial statements from the second quarter of 2020 should be required. And the commission should consider the recent historic decline in oil prices and the impact on Hilcorp.
“The contemporary oil shock provides a natural ‘stress test’ which helps to evaluate the firm’s fitness, ability and wherewithal. But the Commission can only independently evaluate this impact if it has up-to-date financial information and data,” AKPIRG said.
The appeal The City of Valdez, through its counsel, Brena, Bell & Walker, has appealed RCA’s decision that financial statements filed by Harvest Alaska and BP Pipelines (Alaska) are entitled to confidential treatment.
The appeal says when the companies submitted financial statements they failed to claim confidentiality, and thus RCA “erred in failing to hold that Harvest Alaska and BPPA had waived the claim of confidentiality” under Alaska Statute 42.06.445(c).
The appeal also says RCA erred in holding that all the financial statements “relate to the finances or operations of a pipeline subject to federal jurisdiction.”
RCA ruled March 12 that financial information submitted in its dockets on the common carrier components of the proposed BP-Hilcorp transaction must be considered confidential and also allowed Harvest Alaska and BP Pipelines (Alaska) to file unaudited statements.
| 