BP will sell all its Alaska assets to Hilcorp
BP will sell all its Alaska assets to Hilcorp
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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,
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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Responsible Conservation > Political Allocation
How you doin AGL4now, I知 kindo thinking this could be a good thing, what are your thoughts on the matter at hand?
(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.)
BP has always been "top heavy" with support departments in the field and in town. Hilcorp doesn't work that way. They only have like 25 people in Houston running $1B+ company, and doing quite well. Just in Anchorage alone, BP had over 100 people. After working a few years on the BP side, and now with Hilcorp, I can say with absolute certainty that they in fact can do more, with less. Procurement and various other dept's, yes, will be gone. They don't believe in having an assistant to an assistant to an assistant like BP did...
Not too bash BP pad operators, but those that will stick around and were used to hot lunches everyday, having it easier then most, and running only 1 or 2 pads, will be flanging up, hitting a lick, and running 3-4 pads. Just watch.
When Hilcorp hires on, they tell you straight up that you won't get rich, but you'll be compensated, there will be a pay decrease up front, just wait it out. It doesn't last for long though and typically after 2yrs, the bonus program will easily put them over what they ever made at BP...
Just my .02
I can't disagree with anything posted: particularly since I worked with/for BP for quite a few years and was astonished at the amount of, for lack of a better word, bureaucracy that interfered with getting the work done. Back in the day, I presented a contract for signature / execution: because of the $$ involved (think $9XX,XXX,XXX), it had to be approved by 2 levels above me before Mr Level 3 could sign it. While I appreciate that big bucks need scrutiny, the fact that a) I couldn't simply tell Mr. Level 3 that it was a sound contract; and b) that Mr. 1 and Mr. 2 assured Mr. Level 3 that "It's good because ol PA12drvr said it was" seemed to me to be the height of inefficiency.
Nevertheless, while I'm personally in favor of the more-with-less approach, the reduction in support groups, however identified will have big impact on the Anchorage market. I directly know of support roles, a couple in procurement, a couple in commercial-type stuff that will be eliminated from the Anchorage market: at an average salary + bonus of circa $275,000, that's a big impact. Extrapolate it to represent the number of jobs leaving Anchorage and it's a big hole.
Nothing against Hilcorp: the Alaska oil patch needs fresh approach and vigor that hopefully Hilcorp, OilSearch and a couple others can bring.
Given their history in AK I'm guessing we may have a few more spills and such up on the slope as well.
Hilcorp doesn't exactly have the best environmental record.
They certainly have had their share of spills in the Inlet.
Then there's the issue of drilling on the refuge without a permit.
The fine was cheaper than the cost of the drilling rig per day so Hilcorp drilled for over a week without a permit from the state because it saved them a lot of money.
More oil in the pipeline and less jobs at the top I'm guessing.
BP has been top heavy for quite some time.
I'm not against Hilcorp but time will tell if it's a good deal for AK or not.
I've only been working on the slope for the last 15 years or so as a contractor so I base my opinions on my years up here working at Conoco, Exxon, and BP leases.
It is nice to hear the opinion of other slope workers as IMHO that holds more weight in the discussion.
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