Baked Alaska

BP sells Alaskan business

Image source: BP, BBC - Giphy, rockstar_images, Brent Hofacker, violetblue - Shutterstock

What's going on?

Oil behemoth BP has all the ingredients for a tasty future after announcing the $6 billion sale of its Alaskan business this week – bringing 60 years of activity to a golden-brown finish.

What does this mean?

BP is selling its Alaskan business to American private oil firm Hilcorp, which will get its yolk-covered hands on (among other things) BP’s stake in Prudhoe Bay – the most productive oil field in US history.


BP’s sale might not have come as a surprise. Oil-producing companies have put their spending on ice in recent years, and instead whisked up higher shareholder returns with increased dividends and share buybacks. And as less conventional energy like shale oil and gas becomes increasingly popular, Alaskan oil production has declined. In fact, the state’s major oil pipeline has been running below capacity for years.

Why should I care?

The bigger picture: Trying a new recipe.


This sale is part of a larger change at BP. Last year, the company bought miner BHP’s US shale business and promised to sell off $10 billion of assets to help pay for it. And its rivals – from Occidental (which beat Chevron to acquire Anadarko Petroleum this year) to Saudi Aramco (whose profits dwarf even Apple’s) – are leaning into their shale oil and liquefied natural gas businesses, perhaps due to environmental concerns. Renewable energy like wind and hydro might well be the future, but natural gas – which is less damaging than coal – is considered a good alternative in the meantime (tweet this).



Zooming out: Thomas Cook’s burnt its fingers.


What’s good for oil firms (i.e. high oil prices) is often bad for their customers – especially airlines. In June, a troubled Thomas Cook, the world’s oldest travel company, began takeover discussions with Chinese travel firm Fosun Tourism Group. And on Wednesday, they reached an agreement: Fosun and Thomas Cook’s bondholders will take over the firm. That won’t leave much for existing shareholders, who sent the stock down 17%.

Originally posted as part of the Finimize daily email.

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