Hilcorp operates Alaska’s largest oil field. Its chairman says they’re going to Venezuela
Two big players in Alaska’s oil industry say they’re keen on investing in post-Maduro Venezuela.
This article was originally published in Northern Journal, a newsletter from Nathaniel Herz. You can subscribe by clicking on this link.
Two titans of Alaska’s oil industry both told President Donald Trump on Jan. 9 that they intend to expand into post-Maduro Venezuela.
The public comments, Alaska-based experts said, raise questions about how new drilling opportunities in the South American country could create competition for investment in Alaska’s petroleum-based economy.
Texas-based Hilcorp operates Alaska’s largest oil deposit, Prudhoe Bay, where it’s ramped up investment in recent years after buying its stake in the field from oil giant BP. It also produces the vast majority of natural gas that urban Alaskans use for heat.
Hilcorp’s chairman, Jeff Hildebrand, participated in the White House meeting, which Trump convened with oil executives to discuss opportunities in Venezuela. He told the president that “Hilcorp is fully committed and ready to go, to rebuild the infrastructure in Venezuela.”
“You’ll go there? You’ll be going?” Trump asked.
“Yes,” Hildebrand said.
“Good, that’s good. You’ll be very happy,” Trump said.
The meeting took place less than a week after a U.S. military operation, at Trump’s direction, deposed Nicolás Maduro, Venezuela’s socialist leader, and brought him to New York to face drug and corruption charges. Trump said immediately after the operation that U.S. oil firms would move into the country and revitalize its flagging petroleum industry.
Another executive whose company has made some of Alaska’s largest new oil discoveries in recent years, and which continues to drill in search of new prospects, also said at Friday’s meeting that his business is “ready to go to Venezuela.”
“It is prime real estate,” said Bill Armstrong, whose firm discovered Alaska’s Pikka field, which an international company is now spending $3 billion to develop.
Armstrong said his business already controls 8 million acres adjacent to Venezuela and is “heavily invested” in the area.
The comments from Armstrong and Hildebrand were notably enthusiastic compared to those of executives of larger, publicly traded oil companies like ExxonMobil. The chief executive of that firm — which also owns a share of Prudhoe Bay — called Venezuela currently “uninvestable” at the White House meeting.
“We’ve had our assets seized there twice,” the executive, Darren Woods, said. “So, you can imagine, to re-enter a third time would require some pretty significant changes from what we’ve historically seen.”
An Alaska-based Hilcorp spokesman, Matt Shuckerow, declined to comment on Hildebrand’s remarks.
Armstrong, in a text message, suggested that a reporter enquire with his oil business’s Alaska-based lobbyist, Ashley Reed.
Reed, in a phone interview Saturday, acknowledged that there are still numerous obstacles to investment in Venezuela’s oil industry — including the country’s political climate and security. But he also said that Alaskans shouldn’t discount the risk that the South American country could be new competition for oil companies’ investment dollars.
“If Hildebrand takes his money down there, and Bill, we don’t have much left, except ConocoPhillips,” Reed said.
In his own correspondence with Armstrong this week, Reed added, the oil executive said some of the arguments against investing in Venezuela could also be made about Alaska.
“Enormous, resource-rich areas. Erratic fiscal policy. Government seemingly unwilling to initiate meaningful reforms,” Reed said. “How is that different from Maduro’s policies — where he wants it, and he just takes it?”
