If BP has to bail on the Slope, maybe the Norwegians can help

Scott Woodham


0618-concernedvikingTO: Statoil Hydro
BCC: Sinopec
SUBJECT: To the longboats!

Dear Safety Vikings,

No doubt you're aware of the immense plumes of oil that have been blowing out into the Gulf of Mexico since April 20 from the site of the former Deepwater Horizon drilling rig. We say "no doubt" because you've already offered to help with the disaster response. Thanks for that, by the way. Surely you know that the oil giant, BP, has been taking lots and lots of heat and incurring enormous costs during the whole matter.

BP is taking on so much financial responsibility over the disaster that, as one market watcher from The Wall Street Journal said, "The vultures are circling." Basically, BP has found itself in such deep Macondo (as it were) that a fire sale (or, more accurately, a blowout sale) of up to $10 billion in assets seems to be getting more possible by the day.

That same article mentioned that BP might put up its claims on Alaska's Liberty field up for sale. It didn't mention BP's caretaking share of oil and gas facilities on Alaska's North Slope, but we imagine that if the costs keep climbing as fast and far as they have been, conceivably that stake could wind up on the auction block. Since we've heard your record of safety in oil and gas operations is unmatched, and your resources still manage to remain competitive, we just thought we'd give you a heads-up and make sure you're checking the classifieds (FYI, Barrow doesn't have Craigslist).

However, don't hold your breath. Many Alaska lawmakers are hesitant to say whether or not Alaska should trust BP anymore, and many of the company's supporters in the state seem unwilling to accept the possibility, however remote, that it might have to leave as a result of the Gulf blowout. The Concerned are very concerned about it all, and if BP has to bail out of managing Alaska's North Slope oil infrastructure, we at least want to make sure the right company takes its place.

You could very well be that company, but only if you don't tell anyone that the Norwegian government controls nearly two-thirds of you -- that could sink the deal for many Americans. These days they seem to equate any amount of state participation in an industry with blistering Stalinism. Just don't mention it, and you should be fine.

In the literature about yourselves, you say that you follow something called "The Statoil Way." The Statoil way includes all kinds of phrases The Concerned can really get behind, things like "absolute requirements for health, safety and the environment," "personal integrity," and, most interesting to The Concerned, "values-based performance culture."

If we read that right, it means you've made explicit values ("Courageous, Open, Hands-on, Caring") the foundation of your operations, and you hold yourselves to them based on personal integrity! Sorry if that sounds rude; these days we're used to companies leaving their actual operational values implicit. We were also interested to learn that you "are convinced that all accidents can be avoided." We're dying to know what convinced you of that; we always thought accidents were a natural cost of doing business in the Arctic.

We're not alone in thinking that your presence would be good for Alaska's oil industry. Sarah Palin, Alaska's former governor, even said last week that President Obama should take you up on your offer to help with the Gulf blowout response. We The Concerned immediately thought of Alaska. We wondered why Palin didn't mention your safety record when she was still governor and still searching for ways to improve operating conditions on the North Slope after that series of pipeline accidents in 2006, but we guess it's better late than never.

But late might not always be better than never. Buying BP's share of North Slope infrastructure might be more hassle for a company than it's worth. In the past several years, there has been a string of spills, accidents, and injuries at Slope facilities maintained by the company. According to a new investigation by Truthout.org this week, fed-up employees and internal documents say that an alarming amount of infrastructure managed by BP on the North Slope is basically a ticking time bomb made of rotting pipes and being managed with an "operate to failure" attitude. We The Concerned aren't commercial real estate brokers or anything, but the going price for a time bomb can't be that much. The insurance alone would be outrageous!

We're not sure, but we'll just throw this out there in case it sweetens the idea of taking over on the Slope. Alaska's only alcohol distillery recently invented the world's first smoked salmon-flavored vodka. We imagine it wouldn't take much for them to flavor vodka with pickled herring or caraway seeds, or whatever else you think might best suit your tastes. We've also heard rumors that you stock your workhouse cafeterias with king crab, not shabby prime rib, and if true, that alone would interest many eager, prospective Alaskan employees.

Anyway, we hope you'll give this some thought and keep on your toes. Norway and Alaska have a lot in common, most significantly petroleum revenue dependence and deeply ingrained values of personal responsibility. You've been operating facilities in the Arctic and sub-Arctic, both onshore and in some treacherous offshore areas, for decades. Alaska has decades-old onshore facilities, and it seems lately that most of the state's future oil development lies offshore. Plus, Alaska has numerous Sons of Norway Lodges and at least one totally awesome Little Norway Festival. See? A perfect match!

The Concerned