BP Alaska plans layoffs following Hilcorp sale

AP News
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Posted: Sep 15, 2014 9:56 PM

JUNEAU, Alaska (AP) — BP Alaska, a major player in the state's oil industry, on Monday announced plans to lay off 275 employees and direct contractors early next year.

BP's business in Alaska will be smaller because of the previously announced sale of its interests in four North Slope oil fields to Hilcorp, spokeswoman Dawn Patience said.

The layoffs, combined with 200 of the roughly 250 people whose work was tied to those fields and accepted jobs with Hilcorp, represent about 17 percent of the total number of BP employees and contractors in Alaska, Patience said. BP has 2,725 employees and direct contractors in the state; of that total, 2,250 are employees.

When the sale was announced in April, employees were told "the entire business is going to look different at the end of this," Patience said.

"The Alaska business is still very important to BP. It's just a smaller business than it was before," she said.

Hilcorp spokeswoman Lori Nelson said job offers were made to about 200 workers associated with the assets in the deal. She said the final number who will be hired "is still a work in progress. We're going to continue to assess our needs, and we're going to be working to get fully staffed before the official acquisition date takes place."

The layoffs announced Monday include overhead associated with the fields, Patience said.

The sale, which Patience said is expected to close later this year, involved all of BP's interests in the Endicott and Northstar oil fields and a 50 percent interest in the Liberty and Milne Point fields. It also included BP's interests in the oil and gas pipelines associated with those fields, BP said in April.

BP's president for Alaska operations, Janet Weiss, said at the time that the sale would allow for BP to focus on maximizing production from Prudhoe Bay and advancing plans for a major liquefied natural gas project. BP is working on the latter with the state, Exxon Mobil Corp., ConocoPhillips and TransCanada Corp. The companies have said the gas-line project, as proposed, would be the largest of its kind ever designed and built.

The company said it remains committed to plans to continue investing in Prudhoe Bay, including adding two drilling rigs, one next year and one in 2016.

In a statement Monday, Gov. Sean Parnell said he was "extremely disappointed" by the planned layoffs, including the impacts on affected families. Parnell said that when he spoke with Weiss on Monday, she assured him that BP "remains on track for the new rigs planned for the North Slope and for new investment promised to Alaskans."

BP, Exxon and ConocoPhillips all advocated the oil-tax cuts approved by state lawmakers in 2013 as a way to encourage new investment and additional production. The state relies heavily on oil revenue to fund government operations.

BP will offer early retirement and severance packages as part of the layoffs, Patience said. She expects the focus of the layoffs to be more on the Anchorage-based staff than workers on the North Slope. About two-thirds of the workforce is on the Slope, she said.