ANCHORAGE (KTUU) - The company buying BP out of its Alaskan assets brings with it a history economic success, environmental setbacks and a major layer of insulation between its operations and public knowledge of those operations.
Hilcorp, founded by Texas billionaire Jeffery Hildebrand, first began increasing its investment in Alaska in the Cook Inlet. It is now the largest privately held oil and gas company in America.
"Hilcorp came in several years ago in the Cook Inlet similar to what we're seeing this week with BP selling out on the North Slope. You had majors that were in the Cook Inlet and wanted to leave. It was declining, they just didn't see a great future there, they wanted to get out and Hilcorp started buying up the properties, which included oil and gas leases, producing fields, the platforms in Cook Inlet," said Larry Persily, longtime oil industry writer and former Deputy Commissioner of the Alaska Department of Revenue.
The company has a history of environmental and safety related incidents, yet it ranks better than the statewide industry average on the metric OSHA uses to calculate workplace safety.
Notable missteps include a pipeline leak beginning in December of 2016 that continued for nearly five months and a cleaning incident involving unauthorized use of nitrogen that was nearly fatal for three workers.
In its decision an order following the nitrogen incident, the Alaska Oil and Gas Conservation Commission wrote in its conclusion, "Hilcorp has a significant history of noncompliance with AOGCC regulations."
While Hilcorp has been successful at bringing profits out of existing fields, the fact that it is privately-owned means that there is less information about its financial status. While private companies are not obligated to release as much information as publicly-traded corporations, some are concerned that a smaller player taking on a large role of Alaska's oil landscape might not be able to handle the costs associated with a catastrophe.
"Right now you have three pretty deep pockets on the North Slope - Exxon, BP and Conoco. Should something go wrong, they have the ability to cover the damages, pay for repairs, pay for response, pay for cleanup. Hilcorp is much smaller. For example. BP has about 1,600 employees in Alaska. Up until this purchase, Hilcorp had about 2,200 to 2,300 employees nationwide, so it's a much smaller company. It's a successful company, it's a profitable company. It certainly has a lot of revenues, but it's not as big as BP," Persily said. "Some people I have talked to have questioned, if there is a major accident or problem or spill, does Hillcorp have the financial wherewithal to pay its share... I would like to think that BP asked that question, I would expect the state will ask that question. I expect that its partners on the North Slope Conoco and Exxon will say 'hey great to have you here, can you cover your share if something goes wrong?".
Copyright 2019 KTUU. All rights reserved.