BP, a major player on Alaska's North Slope for decades, is selling all of its assets in the state, the company announced Tuesday.
Hilcorp Alaska is purchasing BP interests in both the Prudhoe Bay oil field and the trans-Alaska pipeline for $5.6 billion, BP announced in a release.
The sale, which must be approved by state and federal regulators, comes as BP attempts to divest $10 billion in assets by 2020.
"Energy is a cornerstone of the Alaskan economy and this investment will help drive growth in local energy production, jobs and state and local revenue for many years to come," Jason Rebrook, president of Hilcorp Energy, said in a release. "Hilcorp has a proven track record of bringing new life to mature basins, including Alaska's Cook Inlet and the North Slope, and we have a clear understanding that an experienced local workforce is critical to success."
BP's history in Alaska dates to 1959, and the British company drilled the confirmation well for the Prudhoe Bay field in 1968.
Prudhoe Bay, the most prolific oil field in U.S. history, has produced more than 13 billion barrels of oil. Production has been in a steady decline since the late 1980s.
"We are steadily reshaping BP and today we have other opportunities, both in the U.S. and around the world, that are more closely aligned with our long-term strategy and more competitive for our investment," BP Chief Executive Bob Dudley said in the release.
"This transaction also underpins our two-year $10 billion divestment program, further strengthening our balance sheet and enabling us to pursue new advantaged opportunities for BP's portfolio within our disciplined financial framework," he said.
Under terms of the agreement, Hilcorp will pay $4 billion in the near-term and $1.6 billion later.
BP employs about 1,600 workers in Alaska.
"BP is committed to providing clarity about their future as soon as possible as part of the transition process with Hilcorp," the release said.
Justin Furnace, a vice president for Hilcorp Energy, said in an email to The Associated Press that plans for the BP workforce "will develop as we determine how we will integrate the acquisition into Hilcorp's existing operations."
Hilcorp Alaska, based in Anchorage, is an affiliate of the Houston-based Hilcorp Energy.