Wednesday's confirmation that Phillips Petroleum Co. is purchasing all of ARCO's Alaska assets from BP Amoco is great for the state. It means the Federal Trade Commission now can sign off on the BP/ARCO merger that's been in the works for more than a year. More important, it means the slowdown of new activity on the Slope soon will be ending and Alaskans can return to work.
The choice of Phillips is a good one. The company has decades of experience here, knows what to expect and has proven itself to be a good corporate citizen.
At a press conference announcing the agreement, Gov. Knowles noted that by offering up to $7 billion to purchase ARCO's Alaska assets, Phillips has tied its own prosperity to that of the state. ''That's quite an ambitious statement of confidence that shows the company's strong commitment to Alaska,'' Knowles said.
Sen. Frank Murkowski saw it as a good fit for the economy. ''The company knows Alaska and is big enough to afford Alaska's costs, but small enough where it will really want to develop and get to market the natural gas holdings it is acquiring from ARCO,'' he said.
Phillips' Chairman and CEO Jim Mulva, in town along with BP Amoco Deputy CEO Rodney Chase to sign the agreement, committed to aggressively pursue exploration and development opportunities here in an environmentally responsible manner.
He welcomed to the Phillips' family Alaska's ARCO employees, for whom he said he has great respect and admiration. Phillips intends to use the ARCO staff's technical expertise in the continued development of Alpine, Kuparuk, NPRA and Prudhoe Bay satellite fields. Phillips will be investing more than a half-billion dollars over the next year in these development projects.
Mulva was particularly optimistic about reserves of natural gas, and he committed to aggressively look at the various options for delivering that gas to market.
BP's Chase pledged that both companies will honor the provisions of the Charter agreement signed with the state. He said provisions pertaining to the sale of natural gas; the purchase of production from small North Slope producers; access to BP's North Slope facilities; the release of seismic data; conversion of the BP-chartered tanker fleet to double hulls; Alaska hire, buy and build; the cleanup of orphan sites, and charitable giving all remain in force.
Last year, when this acquisition process began, there was disagreement among Alaskans about whether the efficiencies and lower costs of the merger outweighed the merits of competition.
With Phillips now in the picture, Alaskans get the best of both worlds: the efficiencies of a merged BP/ARCO operation elsewhere, and continued competition, jobs, business opportunities and commitments in Alaska's oil patch.
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