BP is selling its Alaskan assets to Hilcorp Energy for $5.6 billion.
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The oil major is leaving a region it has operated in for 60 years.
The sale includes interests in the Prudhoe Bay oil field, Point Thomson gas field and the trans-Alaska pipeline system, BP said in a release.
The sale announced Tuesday would be subject to state and federal approval. The sale comes as BP attempts to divest $10 billion in assets by 2020.
Energy analyst Phil Flynn said since Bob Dudley became BP's chief executive, the company has been shedding older fields and those seen as more inefficient and expensive. He sees BP's announcement as strategic.
Jason Rebrook, president of Hilcorp Energy Co., in a statement said his company has a record of "bringing new life to mature basins, including Alaska's Cook Inlet and the North Slope, and we have a clear understanding that an experienced local workforce is critical to success."
Larry Persily, a former federal coordinator for Alaska gas projects, said Hilcorp has made a mark by picking up projects others moved away from and "wringing more money out of them," citing Cook Inlet as an example.
Hilcorp will determine how to integrate the BP workforce into its operation. BP employs about 1,600 workers in Alaska.
The Associated Press contributed to this article.