BP Tweaks Vast $5.6bn Alaska Deal On Oil Price Crash

British energy major BP said Monday that crashing oil prices had prompted it to tweak the terms of a gigantic deal to sell off its Alaska operations.

Hilcorp Alaska had agreed in August 2019 to purchase the assets, including operations in the mammoth Prudhoe Bay oilfield, for $5.6 billion in a move that will see BP exit the US state after a 60-year presence.

Crude futures have however plunged to record lows this month, with US oil futures sinking briefly into negative territory on the back of demand-destroying coronavirus and a vicious price war between Saudi and Russia.

The energy sector -- whose profits and revenues are heavily linked to crude oil prices -- has been ravaged as COVID-19 slams the brakes on economic activity.

"Reflecting recent significant market volatility and oil price falls, BP and Hilcorp have successfully renegotiated the financial terms of the deal to respond to the current environment," BP said in a statement.

The overall price tag remains the same but the structuring and phasing of payments has been modified.

The revised deal terms are "structured with flexibility to phase and manage payments to accommodate current and potential future volatility in oil prices", it added.

BP said that it still expects the transaction to be completed in mid-2020.

The disposal is part of BP's $15-billion divestment program to help the company shore up its balance sheet by 2021.

The British oil major first entered oil-rich Alaska in 1959 -- the same year it officially became a US state -- and helped construct the 800-mile (1,300-kilometer) Trans-Alaska Pipeline.