Canadian Manufacturing

BP’s Alaska business to lay off 275 workers, contractors

Job cuts a result of previously announced sale of interests in four Alaska oil fields to Hilcorp Energy Co.

JUNEAU, Alaska—BP Exploration Alaska Inc., a major player in the state’s oil industry, announced plans to lay off 275 employees and direct contractors early next year.

BP’s business in Alaska will be smaller because of the previously announced sale of its interests in four North Slope oil fields to Hilcorp Energy Co., spokesperson Dawn Patience said.

The layoffs, combined with the 200 people who have accepted jobs with Hilcorp, represent about 17 per cent of the total number of BP employees and contractors in Alaska, Patience said.

BP has 2,725 employees and direct contractors in the state; of that total, 2,250 are employees.

When the sale was announced in April, employees were told “the entire business is going to look different at the end of this,” Patience said.

“The Alaska business is still very important to BP. It’s just a smaller business than it was before.”

The sale, which Patience said is expected to close later this year, involved all of BP’s interests in the Endicott and Northstar oil fields and a 50 per cent interest in the Liberty and Milne Point fields.

It also included BP’s interests in the oil and gas pipelines associated with those fields, BP said in April.

BP’s president for Alaska operations, Janet Weiss, said at the time that the sale would allow for BP to focus on maximizing production from Prudhoe Bay and advancing plans for a major liquefied natural gas (LNG) project.

BP is working on the latter with the state, Exxon Mobil Corp., ConocoPhillips Co. and TransCanada Corp.

The companies have said the gas line project, as proposed, would be the largest of its kind ever designed and built.

The company said it remains committed to plans to continue investing in Prudhoe Bay, including adding two drilling rigs, one next year and one in 2016.

BP, Exxon and ConocoPhillips all advocated the oil-tax cuts approved by state lawmakers in 2013 as a way to encourage new investment and additional production.

The state relies heavily on oil revenue to fund government operations.

BP will offer early retirement and severance packages as part of the layoffs, Patience said.

She expects the focus for the layoffs to be more on the Anchorage-based staff than workers on the North Slope.

About two-thirds of the workforce is on the Slope, she said.

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