The sale will include BP's entire upstream and midstream business in the state, including BP Exploration and BP Pipelines (Alaska) interest in the Trans Alaska Pipeline System (TAPS).
Bob Dudley, BP CEO, said: "We are steadily reshaping BP and today we have other opportunities, both in the US and around the world, that are more closely aligned with our long-term strategy and more competitive for our investment. This transaction also underpins our two-year $10 billion divestment programme, further strengthening our balance sheet and enabling us to pursue new advantaged opportunities for BP's portfolio within our disciplined financial framework.
Under the terms of the agreement, Hilcorp will pay BP a total consideration of $5.6 billion, comprising $4.0 billion payable near-term and $1.6 billion through an earnout thereafter. Subject to state and federal regulatory approval, the transaction is expected to be completed in 2020. The deal forms a significant part of BP's plan to divest $10 billion of assets over 2019 and 2020.
BP's net oil production from Alaska in 2019 is expected to average almost 74,000 barrels a day.
Hilcorp has been operating in Alaska since 2012 and is today the largest private oil & gas operator in the state, currently operating more than 75,000 barrels of oil equivalent a day (boe/d) gross production. In 2014 Hilcorp purchased interests from BP in 4 operated Alaska North Slope oilfields.
Bob Dudley added: "Our exit from Alaska does not in any way diminish BP's commitment to America. We remain very bullish on the US energy sector. In just the last 3 years we have invested more than $20 billion in the US and we will continue to look at further investment opportunities here."