NANA strengthens in-state business holdings
NANA Development Corp. has bought back into Alaska after a challenging financial period pushed the company to sell several of its subsidiaries.
Vice President of Operations Eric Billingsley said in an interview that the Alaska Native corporation pulled the Alaska branches of WHPacific Inc. and GIS Alaska back under its umbrella after selling the Outside offices of the companies.
The moves are part of NANA’s broader overhaul of its business model to focus its commercial sector on growth in the state.
NANA Development Corp. is the business arm of NANA Regional Corp., which is the Alaska Native corporation for the northwest region of the state.
The former Anchorage office of WHPacific has been renamed Kuna Engineering and GIS Alaska’s fabrication facility in Big Lake is now again known as NANA Construction.
“We’re glad to have these companies back operating inside of NANA,” Billingsley said.
He called the 27-acre Big Lake tract the best fabrication facility in the state given its large size and location, which allows truckers hauling materials to and finished products from the facility to avoid the congested areas of Anchorage and Wasilla.
Leaders of the parent company have been encouraged by the gradual but consistent increase in oil prices — now to the mid-$70s per barrel compared to less than $50 per barrel a year ago — as well as recent oil discoveries by ConocoPhillips and other companies exploring on the Slope as indicators Alaska’s oil patch is set to resume growth.
“We believe in the state. We believe in the opportunities going forward and we want to continue to prove the services across the gamut to everyone involved, not just to oil and gas but to broad-based commercial businesses as well,” Billingsley said.
Kuna Engineering currently has 37 employees and NANA Construction has a workforce of about 190, according to NANA spokeswoman Amy Hastings. She wrote in an email that employment at NANA Construction should remain steady for the foreseeable future and Kuna’s workforce could increase slightly given its work with Teck Resources.
The Kuna Engineering team over the years has come to provide a large portion of the engineering work Teck needs at the Red Dog mine, according to Billingsley.
Teck operates the Red Dog zinc mine north of Kotzebue, which is located on NANA Regional land.
Last year Teck announced that a prospect it had been exploring on state land about 7 miles northwest of Red Dog could be another world-class zinc deposit near what is already a world scale zinc mine if further exploration drilling proves out the resource estimates. Red Dog is one of the largest zinc mines on Earth. Teck is also in the midst of a $110 million upgrade to Red Dog’s mill to increase its production capacity by about 15 percent.
Increased zinc prices have helped NANA Development rebound from several tough financial years, according to company leaders.
NANA Development, which has roughly 15,000 employees through its subsidiary companies, is also heavily involved in the federal contracting sector.
In 2016, the company’s losses in the oil services sector of $61.5 million were part of an overall net loss of $109 million, according to the corporation’s annual report. The corporation absorbed losses in 2014 and 2015 as well.
It sold NANA Oilfield Services to shipping and logistics giant Saltchuk in 2016 and also saw Moody’s downgrade $300 million of its corporate debt, citing deterioration in its core businesses, namely oil and gas.
NANA sold off WHPacific’s Lower 48 offices last year after holding the company for many years prior.
It purchased Grand Isle Shipyard Inc., or GIS, in 2011. GIS was focused on oil and gas support in the Gulf Coast region, according to a NANA release at that time. GIS was then merged with NANA Construction.
NANA also operates NMS, a camp services and facilities management firm, and NANA WorleyParsons, an engineering and project management company. Both are significant support service providers on the North Slope.
Billingsley said he thinks NANA is in a unique position as a resource owner and an active participant in the resource industry through its support service companies.
Keeping businesses like Kuna and NANA Construction also help the parent company and resource owner ensure that development costs are reasonable, according to Billingsley.
“There is a suite of services Teck needs to operate the mine and we have the skills and the opportunities to take advantage of those and contract those; so those dollars stay with NANA and we’re also able to provide wages and opportunities for our shareholders,” he said.
Billingsley noted that NANA has provisions in its agreements with Teck about using its support companies, but typically doesn’t leverage those provisions.
“We want the economically preferable provider and if we’re not, we need to reevaluate some decisions,” he commented.
In addition to supporting Teck at Red Dog, Kuna is engaged in rural development work, such as alternative energy projects for Alaska villages.
“Really, we believe in Alaska, so all the pieces that weren’t Alaska we just let go,” Billingsley said.
Elwood Brehmer can be reached at [email protected].