BP has finally cut a deal with Apache Corp. over the sale of some of BP's assets -- none of them in Alaska.
BP announced today it has entered into agreements to sell assets in Texas and New Mexico, Western Canada and Egypt for $7 billion. The company had said it wanted to raise $10 billion to help offset costs associated with the Gulf of Mexico oil spill.
News reports in the last week had cited unnamed sources with knowledge of BP's talks with Apache who said BP was trying to work a deal with the Houston-based independent to buy some of BP's Alaska assets, possibly half of its Prudhoe Bay field. That has led to much speculation here about possible ramifications on production, jobs and state revenue, even gas line projects. House Democrats last week called for hearings on the issue.
Today's announcement says nothing about Alaska, and BP spokesman Steve Rinehart said the company has no comment. "We don't comment on market speculation," he said.
During a conference call Tuesday afternoon to discuss the BP acquisitions, Apache Corp. chairman Steve Farris wouldn't say much about whether BP's Alaska holdings came up during negotiations.
"I will tell you there was an awful lot of chatter and there was an awful lot of asset mixes being thrown around," Farris answered when asked if Alaska had, as rumored, come into play. "The one thing I will say is that we chose this asset mix. In terms of our future, I didn't anticipate this one. If it would not have been for the Gulf of Mexico incident I am sure we wouldn't have been here tonight."
The divestments announced by BP include $3.1 billion for 10 Permian Basin fields in Texas and southeast New Mexico, $3.25 billion for Western Canadian gas assets, and about $650 million for exploration concessions in Egypt and business concessions in the Western Desert. A press release says the Canadian deal does not include BP's interests in the Kirby and Leismer gas fields, natural gas liquids, Arctic exploration or Mackenzie Delta assets, oil sands, St. Lina heavy oil or the North America Gas trading business.
BP said it expects all the transactions to be completed by the third quarter of 2010.
BP is one of Alaska's largest oil and gas producers. The company, which opened its first office in the state in 1959, operates 15 oil fields on the North Slope and four pipelines. It has ownership interest in six other producing fields and is the largest single owner of the five companies that now operate the trans-Alaska oil pipeline and Alyeska Pipeline Service Co.
Houston-based Apache Corp. is the largest independent oil and gas exploration company in the United States. Its growing empire is the result of an "acquire and exploit" strategy -- bringing new life to mature projects and squeezing more out of them than previous owners. While the company has maintained a presence in Alaska on paper since close to its creation in the 1950s, 2010 appears to be its first venture into the state as a leaseholder and potential producer. Earlier this month the company, through a spokesperson, confirmed it had acquired natural gas leases in Cook Inlet. Buying a stake in Prudhoe Bay from BP would be Apache's first acquisition of oil assets in the Last Frontier.
Contact Patti Epler at patti(at)alaskadispatch.com.