Hilcorp, the Texas-based independent upstream company, will take over the operations of the Point Thompson oilfield in Alaska from ExxonMobil. Hilcorp Energy has evolved into one of the major operators in the region after bp parted ways from the state.
Firstly, as we reported previously, bp ended its presence in the region right after president Donald Trump fast-tracked a series of failed oil auctions in the area. The departure came after the company completed its assets sale to Hilcorp, for a total amount of $5,6 billion.
Now, ExxonMobil also steps back from the North Slope oilfield as the activity in the state plunges. In fact, oil production in Alaska last year fell to 448,000 barrels per day, the lowest since 1976.
As a result, Hilcorp will take over the oilfield operations. The Point Thompson field is one of the biggest producers in the North Slope. However, it has languished for decades, with the state in past years nearly nullifying leases until it struck a deal for the production of liquid gas condensates.
Moreover, and despite Hilcorp becoming the operator, the oilfield will remain 60%-owned by ExxonMobil. According to Exxon spokeswoman Julie King, both companies signed the operations transfer agreement today, and the change on operatorship would happen by early 2022.
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Hilcorp to operate a critical oilfield for natural gas production
On the other hand, even though Exxon holds major shares of Prudhoe Bay and other Alaska oil assets, Point Thomson is the only field the company has operated. Furthermore, and as outlined above, Hilcorp acquired all of BP’s Alaska assets in 2014 and 2020; including its 32% share of Point Thomson and 26% share of Prudhoe Bay. Hilcorp last year also replaced BP as Prudhoe Bay’s operator.
About the relevance of the taking over for Hilcorp, Luke Saugier, senior vp for Alaska, said. “Hilcorp is excited about our continued commitment to Alaska. We welcome the opportunity to apply our proven record of enhancing legacy conventional assets to Point Thomson.”
In addition, Point Thompson is a critical field for natural gas commercialization. It holds about 8 trillion cubic feet of known reserves, roughly a quarter of the North Slope total known reserves. According to Reuters, Alaska’s marketed natural gas production was about 0.9 billion cubic feet per day (bcfd) in 2020, down from a record 1.5 bcfd in 1994.
Finally, according to Exxon data submitted to the state, natural gas liquids production at the field averaged about 8,300 barrels a day between January 2020 to July 2021.
