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Thread: BP Leaving ALASKA

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    Default BP Leaving ALASKA

    https://www.adn.com/alaska-news/2019...ts-to-hilcorp/


    BP will sell all its Alaska assets to Hilcorp

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    Quote Originally Posted by AGL4now View Post
    https://www.adn.com/alaska-news/2019...ts-to-hilcorp/


    BP will sell all its Alaska assets to Hilcorp
    The forum (I think ) is about managing different resources....but no matter: Regardless of other implications, this will be a significant hit to the Alaska economy. Hilcorp will outsource many of its functions to a greater degree than did BP (meaning outsourced to Houston, not just agency staff) and will take a broadaxe to costs/salaries.
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    Member MaximumPenetration's Avatar
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    Quote Originally Posted by pa12drvr View Post
    The forum (I think ) is about managing different resources....but no matter: Regardless of other implications, this will be a significant hit to the Alaska economy. Hilcorp will outsource many of its functions to a greater degree than did BP (meaning outsourced to Houston, not just agency staff) and will take a broadaxe to costs/salaries.
    I知 curious where your information is coming from regarding your comment. I quit BP and went to work for Hilcorp 3 and a half years ago. My income is higher with Hilcorp. While the economy may take a hit with Hilcorp eliminating some of the BP and contract workforce, Hilcorp will be doing major projects and will be doing lots of drilling, which should be a major plus for the economy. I知 basing my comments on what they致e done so far on the three slope assets they acquired from BP in 2014.
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    Quote Originally Posted by MaximumPenetration View Post
    Iツ知 curious where your information is coming from regarding your comment. I quit BP and went to work for Hilcorp 3 and a half years ago. My income is higher with Hilcorp. While the economy may take a hit with Hilcorp eliminating some of the BP and contract workforce, Hilcorp will be doing major projects and will be doing lots of drilling, which should be a major plus for the economy. Iツ知 basing my comments on what theyツ致e done so far on the three slope assets they acquired from BP in 2014.
    My sources aren't official enough to be cited in a journal but I find them pretty reliable: 3-4 individuals up here, a different 3-4 in Houston.

    There's some nomenclature issues involved of course: what is a "major project" ....at one point BP used $100mm as the trigger point, I'm sure it's well above that now to be called a "Major Project" and similarly what's "lots of drilling". In any case, I'm sure Hilcorp will be active on the slope and that, in itself, is a good thing.

    I'll admit that my specific info on slashing costs is based on L48 situations where "same/person/same job" examples resulted in a lower wage...and usually fewer people for any given business element. All the variables of course come into play (job classification, hourly v. exempt, local market competition, etc) so a blanket statement probably wasn't the most accurate but it will be interesting to see how wages are treated now that Hilcorp has eliminated one source of competition for talent and now that they've purchased all of the BP operations in AK, not just specific assets.

    Like any hydrocarbon company, the jobs / positions closest to the wellhead / drill bit (particularly in known regions) are the most valued and will get the most favorable salary and other treatment...and I'd guess from your Soldotna address that you work in a Slope-based position which is closer to the wellhead than an Anchorage position. I think it's fair to say (and my info supports this), that for any given number of active drill sites, producing wells, etc, BP carried a much higher quantity / level of support functions in Alaska than Hilcorp will. Anecdotal accounts of meetings (I give it more credibility than that, but I wasn't at the meetings) wherein senior Hilcorp folks indicate either wholesale elimination of supporting functions or a drastic reshaping of those supporting functions mean that the level of support personnel compared to the level of "make it turn to the right" personnel will be much lower for Hilcorp than for BP....resulting in substantial job losses in Los Anchorage even if not to a similar degree on the Slope.

    I still believe that (once the activities related to the purchase are over) a true apples-apples comparison will show a reduction in compensation to personnel...but if that doesn't happen, all the better. Similarly , I still believe that the next 12 - 18 months will show a drastic decline in the number of personnel employed by the Operator of the former BP assets....again, if it doesn't happen, all the better.

    .... none of this means that Hilcorp is "bad"....if they can make a go of Alaska and make the industry viable up here for longer, more power to them. Alaska has been a less-than-stellar part of BP's portfolio for quite a while and if Hilcorp is able to keep production going or increase it concurrent with Alaska making positive returns to Hilcorp, again, that's great, but it will bring some localized changes that aren't necessarily for the better (either to displaced personnel or the housing market or corporate grants or...).

    While specific changes or the likelihood or impact of specific changes can be discussed ad infinitum, I think it's fair to say that this transition won't be the same as if it was a COP, XOM or other major that had purchased BP's Alaska assets,
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    Bottom line is, the more oil in the pipeline,the better the economy will be. Hilcorp will put much more oil in the pipeline than BP has been producing


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    How you doin AGL4now, I知 kindo thinking this could be a good thing, what are your thoughts on the matter at hand?

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    Quote Originally Posted by hoose35 View Post
    Bottom line is, the more oil in the pipeline,the better the economy will be. Hilcorp will put much more oil in the pipeline than BP has been producing


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    Agree with that. Hilcorp is going to focus on ILX and, while that won't provide the massive influx of cash to the general economy that a $1bn project would, it will be a nice shot in the arm for Alaska in general and will certainly be a good mix of reasonable expenditure ("reasonable" from Hilcorp's perspective) and relatively quick-cycle increase in flowing bbls....which will be good for the State.
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