BP agrees to sell all Alaska operations and interests to Hilcorp. Credit: rawpixel/Pixabay.

UK oil firm BP has agreed to sell its Alaska operations and interests to Hilcorp for $5.6bn, exiting a region it has operated in for 60 years.

Hilcorp Alaska will acquire all of BP’s ownership in upstream and midstream interests in the US state, including the Milne Point and Point Thomson fields, as well as the Prudhoe Bay oilfield.

The deal requires Hilcorp to pay $4bn in the near term and $1.6bn through a subsequent earnout.

BP started working in Alaska in 1959. It is also the operator and holds a 26% stake in Prudhoe Bay oilfield, where production began in 1977.

The Prudhoe Bay has so far produced more than 13 billion barrels of oil and accounted for more than half of the State of Alaska’s 2018 total oil production with 270,000bpd.

BP’s net oil production from Alaska is estimated to average nearly 74,000bpd this year.

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Hilcorp Energy Company president Jason Rebrook said: “Energy is a cornerstone of the Alaskan economy and this investment will help drive growth in local energy production, jobs and state and local revenue for many years to come.”

Entering the Alaskan energy market in 2012, Hilcorp is currently operating more than 75,000boe/d gross production.

In 2014, Hilcorp acquired interests from BP in four operated Alaska North Slope oilfields.

Subject to state and federal regulatory approval, the latest transaction is expected to be completed in 2020.

BP said the deal provides significant progress towards a $10bn divestment programme and advances its strategic agenda.

BP chief executive officer Bob Dudley said: “Our exit from Alaska does not in any way diminish BP’s commitment to America. We remain very bullish on the US energy sector. In just the last three years we have invested more than $20 billion in the US and we will continue to look at further investment opportunities here.”