Hilcorp Energy and BP Alaska are asking a state agency to keep from public view many of their answers to questions about how Hilcorp will move ahead with its $5.6 billion purchase of BP Alaska’s assets, according to documents filed on Monday.
After a dramatic plunge in oil prices during the COVID-19 pandemic, the Regulatory Commission of Alaska in April requested additional details from the oil companies about the deal.
In particular, the agency wanted to know if turmoil in the oil industry had “impaired" Hilcorp’s ability to borrow money to finance the purchase of BP’s assets in Alaska.
BP recently announced that it has altered the sale terms with Hilcorp to allow the deal to move ahead, including by accepting slower payments. The overall sale price has not changed since the proposed deal was announced in August. The companies hope to complete the sale by June, following regulatory approval.
The state agency is overseeing the portion of the transaction involving the 800-mile trans-Alaska pipeline and related pipelines. The RCA has previously granted financial privacy to Hilcorp, a decision that is now the subject of a lawsuit brought by the City of Valdez.
In the newly filed documents, the oil companies blacked out answers related to Hilcorp’s “financial fitness” and “access to capital” for the transaction, according to a 74-page response to the agency that includes more than 1,000 pages of attachments.
“Petitioners seek to protect and keep confidential” answers to questions about Hilcorp’s financial reserves and its ability to acquire capital, among other items, the oil companies explain in a separate, 39-page request for confidentiality.
The oil companies, as they previously have, argue that disclosure could put Hilcorp at a competitive disadvantage.
“This seems like an extension of their previous arguments,” said Phil Wight, who has studied the proposed deal for the Alaska Public Interest Research Group.
The consumer rights group has pressed for disclosure of Hilcorp’s finances out of concern that the privately owned company may be too small to handle unexpected costs, such as from a major oil spill.
“This doesn’t allow the public to engage on this in a substantive way," Wight said.
The oil companies publicly answer some of the questions sought by the agency, such as providing information related to crude oil spills since 2003, according to the new documents.
But they seek to keep a wide array of information from public view, including pipeline repairs and operational risk assessments related to the trans-Alaska pipeline.
The agency will make a future determination on the request for confidentiality, said Grace Salazar, a spokeswoman with the RCA.
[Because of a high volume of comments requiring moderation, we are temporarily disabling comments on many of our articles so editors can focus on the coronavirus crisis and other coverage. We invite you to write a letter to the editor or reach out directly if you’d like to communicate with us about a particular article. Thanks.]