Today, Alaska is navigating through unprecedented challenges brought on by the Russia-Saudi Arabia standoff and coronavirus, which has resulted in an oil price crash. Increasing uncertainty surrounding these issues leaves Alaska’s economic lifeblood, the oil and gas industry, struggling.
Even in this uncertainty, Hilcorp continues to boldly invest in Alaska’s future. That investment will increase substantially with the successful purchase of BP assets. We need to take this confident step forward together with a company that has earned our trust through a proven eight-year track record of stabilizing and enhancing oil field production in Alaska. Hilcorp is largely responsible for the dramatic turnaround in Cook Inlet production and has shown it can extend the life of legacy North Slope fields such as Milne Point, where production increased from 21,000 barrels per day to 32,000 barrels per day in less than two years. Those are results to be proud of.
Hilcorp’s niche for revitalizing aged oil fields is a perfect fit for Alaska’s flagging oil industry. I speak from firsthand experience from working with Hilcorp in the oil field. We have worked alongside many of the oil industry’s big players, but Hilcorp distinguishes itself with its high work standards, environmental and safety practices, and innovative thinking. They have demonstrated themselves to be a well-managed company and possess the expertise necessary to succeed via acquirement of BP assets.
Red tape and bureaucratic delays leave Alaska at risk of losing the stabilizing force and increase of opportunities Hilcorp’s presence in the oil field would provide. One such delay is the decision of whether or not to release Hilcorp’s financial and proprietary information to the public — an unprecedented requirement that is shortsighted and arbitrary. Hilcorp has earned the position it enjoys today through sound financial and business decisions. The state of Alaska already maintains robust oversight of Hilcorp’s finances to operate on the Slope. Alaska’s regulators must be trusted to do their job in determining Hilcorp’s financial solvency without being pressured to deviate from standard confidentiality practices.
Hilcorp’s “privately owned” status should not be viewed as a financial handicap. Rather, it should be seen as advantageous in that it is able to move faster, adjust to market dynamics quickly, and implement new technology. Last month, BP executive Damian Bilbao said Hilcorp’s leaner business model would benefit Prudhoe Bay and the state. “We saw them deliver a new pad faster, more efficiently and more effectively than, frankly, we (BP) would have — or than we did for many years.”
The consequences of continuing to impede Hilcorp’s efforts will negatively impact Alaskans and private business looking to invest in our state. Hilcorp may pull back on its spending plans, leaving us with fewer jobs and reduced economic activity. This should deeply concern Alaskans, because they are the ones who stand to lose.
Alaskans have a good thing going with the BP/Hilcorp deal. Let’s encourage our state leaders to keep Alaska’s “Open for business” sign turned on by setting aside the rhetoric and red tape and making strong business decisions that will benefit Alaska and its people for years to come.
Dave Cruz is president of Cruz Construction Inc. of Palmer. He is a lifelong Alaskan.