En­ergy com­pany mov­ing Lower 48 of­fice and 200 em­ploy­ees to Den­ver

The Denver Post - - FRONT PAGE - By Jesse Paul

BP is mov­ing its Lower 48 re­gional head­quar­ters to Den­ver from Hous­ton, putting the mas­sive en­ergy com­pany in a bet­ter position to man­age about twothirds of its on­shore oil and gas prop­er­ties and to in­vest fur­ther across the Rocky Mountain West.

The com­pany on Wed­nes­day said it has signed a lease for 86,000 square feet of space in the new Riverview build­ing, in the 1700 block of Platte Street, and plans to bring to Den­ver about 200 of the 450 peo­ple who work in its on­shore oil and gas pro­duc­tion of­fice in Texas — in­clud­ing CEO David Lawler.

The new BP Lower 48 head­quar­ters — which will cover Colorado, New Mex­ico, Ok­la­homa, Texas and Wy­oming — is ex­pected to open in the first quar­ter of 2018. Staffing levels could in­crease as the division makes fur­ther in­vest­ments in oil and gas re­serves, in­clud­ing in the San Juan Basin span­ning the Colorado-New Mex­ico state line.

“We be­lieve that the San Juan Basin is one of the world-class basins,” Lawler said in an in­ter-

view Wed­nes­day. “It has a pro­lific amount of natural gas. We have a sig­nif­i­cant pres­ence there. This is a com­mit­ment to the San Juan Basin and through­out the Rock­ies up into Wy­oming.”

The new of­fice will put em­ploy­ees within a four- or five-hour drive of BP’s prop­er­ties.

The Lower 48 op­er­a­tions cover an area roughly the size of New Jersey that in­cludes seven oil and gas basins with about 7.5 bil­lion bar­rels in the ground and an av­er­age of 300,000 bar­rels be­ing pro­duced a day.

BP says Lower 48 is the largest operator on the Colorado side of the San Juan Basin, with about 1,300 wells. About 30 per­cent of the unit’s pro­duc­tion comes from the San Juan Basin, which con­tains one of the best coalbed meth­ane reser­voirs in the world.

“We felt like this was the ap­pro­pri­ate time and the right time to move our teams closer to those as­sets,” said Lawler, a Den­ver na­tive and Colorado School of Mines grad­u­ate. “We con­sid­ered other lo­ca­tions, but the pri­mary rea­son for the move was re­ally the prox­im­ity of our ma­jor as­set base.”

The move is a re­turn to Den­ver by BP, which called the city “an im­por­tant en­ergy hub of the fu­ture” and cited a pipe­line of potential em­ploy­ees flow­ing from nearby research uni­ver­si­ties as one of the rea­sons for the move.

Al­though many em­ploy­ees will move from Hous­ton, the city is home to BP’s Gulf of Mex­ico, natural gas, wind and up­stream tech­nol­ogy groups and re­mains im­por­tant to the com­pany’s busi­ness, Lawler said. The new Den­ver hub will give BP Lower 48 three ma­jor of­fices; the third is in Ok­la­homa City. The com­pany’s San Juan Basin op­er­a­tions are based out of Du­rango and Farm­ing­ton, N.M.

“Of course it’s good for Den­ver and for the en­ergy sec­tor in Den­ver, liven­ing it up and hav­ing big­ger names,” said Sarp Ozkan, man­ager of en­ergy an­a­lyt­ics for Drilling­info. “But in the gen­eral con­text of things, it’s re­ally Den­ver’s cen­tral lo­ca­tion that’s pro­vid­ing it a leg up. The Rock­ies and the Wil­lis­ton Basin, not very ac­tive these days with low prices.”

Ozkan said BP prob­a­bly isn’t look­ing to drill in the oil-rich Den­ver-Jules­burg Basin of Weld County, where BP Wind En­ergy built the Cedar Creek II wind farm, but the move could prompt other big­name en­ergy com­pa­nies to take a look at Den­ver, Ozkan said.

“The more com­pa­nies we have here,” he said, “the more vi­brant the en­ergy in­dus­try gets here.”

Al­though the oil-price col­lapse has led to job losses and sig­nif­i­cant of­fice va­can­cies down­town, oil and gas re­mains Den­ver’s fifth­largest em­ploy­ment seg­ment, ac­cord­ing to the Down­town Den­ver Partn­er­ship.

“BP’s se­lec­tion of down­town Den­ver to grow its Lower 48 on­shore busi­ness high­lights down­town’s at­trac­tive­ness for em­ploy­ers look­ing to ac­cess our highly ed­u­cated work­force and our com­pet­i­tive position within the in­dus­try,” the partn­er­ship’s CEO Tami Door said, “and we look for­ward to wel­com­ing BP em­ploy­ees to the cen­ter city.”

Den­ver’s Of­fice of Eco­nomic De­vel­op­ment said it has been work­ing with BP on the new head­quar­ters for about six weeks. The city of­fered about $140,000 in in­cen­tives, in­clud­ing an em­ploy­ment in­cen­tive grant of $100,000 and an es­ti­mated $40,000 busi­ness per­sonal prop­erty tax credit, said Jenna Espinoza, a spokes­woman for Mayor Michael Han­cock.

“With so much of their work hap­pen­ing here in the region, and with all we have to offer for com­pa­nies and their em­ploy­ees, this is a natural fit that will ben­e­fit both BP and Den­ver for years to come,” Han­cock said in a state­ment.

Gov. John Hick­en­looper said BP will be able to tap into Colorado’s thriv­ing en­ergy in­dus­try net­works, the abun­dance of top en­gi­neer­ing tal­ent and the state’s world-class higher ed­u­ca­tion in­sti­tu­tions. “This move re­flects Colorado’s emer­gence as a na­tional en­ergy cen­ter, and we look for­ward to con­tin­u­ing to grow this partn­er­ship,” he said in a state­ment to The Den­ver Post.

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