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The Alaska Supreme Court this week heard a case brought to it by the city of Valdez, which argues that the financial information of privately held Hilcorp should be made public.
The reason for the argument is that Hilcorp bought BP’s assets in Alaska three years ago and all companies that have hitherto operated in the state have been public.
The private ownership of Hilcorp and its request to keep its financial details private after the acquisition were a violation of citizens’ fundamental rights, the plaintiffs claimed, as reported by the Alaska Beacon.
BP announced the sale of its Alaska operations to Hilcorp Energy Co. for $5.6 billion in 2019 and completed it in 2020. The sale included BP’s stake in the Prudhoe Bay oil field, the largest oil field in North America that once produced 1.5 million barrels per day at its peak in the late 1980s. Hilcorp also agreed to acquire BP’s stake in the Trans-Alaskan Pipeline.
Financial details around the deal were not disclosed beyond BP’s explanation that Hilcorp would pay $4 billion in 2020 and another $1.6 billion in 2021 via an earnout over a longer period of time.
Yet Valdez citizens are not focusing on the deal itself. They want to know what the financial situation of Hilcorp is and whether it has the capacity to deal, for example, with an oil spill, the Anchorage Daily News reported.
According to Hilcorp and BP, the city of Valdez does not have a case because it did nothing to stop or challenge the sale process and is only speaking out after the fact of the sale, the report noted.
“As it stands today, we Alaskans, nor the city of Valdez, nor this court has any way to determine whether or not the largest owner of the most important publicly regulated facilities in Alaska has $1,000 in the bank, much less the financial capacity to safely operate these publicly regulated facilities in the public interest,” the attorney who represents the city of Valdez, Robin Brena, told the court, as quoted by the Alaska Beacon.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com