It is a relief to all who have watched and theorized and worried about the proposed BP Amoco takeover of Atlantic Richfield the past year that -- given Federal Trade Commission approval -- Phillips Petroleum Co. will step in where Arco Alaska has left off and the BP merger with Arco's other assets can move forward.
It appears that Arco Alaska employees can breathe a collective sigh of relief with at least a little more certainty in their future. And it appears that contractors can look forward to renewed activity on the North Slope.
But can this new situation really be as good as it looks?
It's not wise to look at something so large as the oil industry with blinders on, but early indications in the Phillips takeover look pretty darn good.
When a new (or in this case an old player with a bigger pot of money) sits down to the Alaska oil industry game, the most important factors Alaskans will look for are a company's commitment to the people of the state, an indication that exploration and development activities will increase, and that the development of natural gas reserves will move closer to reality.
Early news of the Phillips deal contains some good news on all those fronts.
--People: Phillips Petroleum has a huge incentive to work with the state of Alaska and its people. Its holdings here could soon represent a great portion of Phillip's worldwide business ventures. It's only smart to build stronger relationships with more involvement here.
The company is off to a good start with a verbal commitment to keep Arco employees' jobs intact. Signing on with BP to meet all the commitments on nonprofit contributions, environmental cleanups and safeguards, and the major natural gas sale contained in the Charter for Development negotiated by Gov. Tony Knowles' administration also is a good indicator.
--Development: It's a good bet that Phillips would work aggressively to develop its investment. The company is making a hefty gamble relative to its size -- a $14 billion company playing a $7 billion Alaska hand.
In announcing the purchase, Phillips Chief Executive Officer Jim Mulva said the company plans to expand upon exploratory programs and drill more wells than Arco or Phillips has in recent years.
Phillips also is entering the North Slope arena as national attention turns this direction. The attention likely will focus harder and harder as the public feels the tangible pinch of higher gas prices directly related to our country's dependence on foreign oil supplies.
--Gas: It's interesting to note that a company, Phillips, that already operates an LNG plant in Alaska is in line to obtain a fair share of the North Slope's gas potential. In addition to operating the Kenai LNG plant, the company also was party to an Arco-led group studying a North Slope LNG project.
Then there's that investment incentive. If we're sold on the idea that the company will take great and early strides to build a return on its initial investment, and if our newly formed regional port authority can help make gas development look like a profitable venture, well then, as Sen. Frank Murkowski said Thursday in Fairbanks, ''we're closer to gas development now than we ever have been.''
So far, Phillips Petroleum is a welcome player in the Alaska oil industry game.
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