BP’s sale of its San Juan assets is notable

Saturday, Sept. 8, 2018 2:21 PM
BP Operations buildings near the Durango-La Plata County Airport.

BP, the worldwide energy company that has been such a large player in the two-state San Juan Basin’s natural gas field, has announced it sees better opportunities elsewhere. To pay for that redirection, it is putting its holdings in San Juan County, New Mexico, and in La Plata County up for sale, hoping to have a buyer within two years.

Given that BP has explained its move, and set a relatively long time span to make it happen, this is clearly not a distress sale.

The basin has grown to know BP. While it moved its headquarters from Farmington to near Durango-La Plata County Airport (and soon onto Main Avenue in downtown Durango), both counties have benefited from its presence, as have employees in the well-paying energy industry and nonprofits on both sides of the state line.

We will miss its economic presence and leadership. But change of this nature is not uncommon in the energy business. While BP believes it sees opportunities in the Permian Basin of West Texas, other operators are sure to think they can succeed BP to improve on natural gas extraction in the San Juan Basin. The newcomer, or newcomers, will believe their strategies, skills and methods of operation will be more thorough, focused and nimble, and perhaps more cost-effective, than those of BP. And that the results will gain them profits in excess of the cost of acquisition. They may well be correct.

While we have no way to determine Hilcorp’s successes, that young, Texas-based company with its founder at its head has owned ConocoPhillips’ holdings for about a year. ConocoPhillips had been an equally large energy component in the San Juan Basin.

When the successor to BP arrives, there is certain to be outreach from both the community and the company. Whether the results will be as successful for the community as they have been with BP is, of course, uncertain. But most companies want to help improve the communities where their employees live and they do business.

In the meantime, natural gas will continue to flow and the county’s taxing districts and royalty owners will continue to benefit. There may even be some new drilling, as BP has some approved permits.

Expect to see BP’s signage in the Bank of Colorado building at Main Avenue and 12th Street soon. Technology has made it possible to manage and grow an energy investment such as the San Juan Basin with more personnel at their desks and fewer in the field. For BP, the ubiquitous beefy pickup with a whip antenna topped with an orange pennant has become less ubiquitous.

Of course, the pickups may return with the next owner. That is often the nature of energy extraction and delivery.