Anadarko and BP Enter Deepwater GOM Exploration Agreement

Anadarko Petroleum Corporation has entered into a joint venture with BP Exploration & Production Inc. to explore 95 deepwater blocks held by BP in the Garden Banks and Keathley Canyon areas of the Central Gulf of Mexico.

The 95 blocks, which make up an area known as South Auger, are part of a larger 640-block area of mutual interest where the two companies will license and reprocess 3-D seismic data. These blocks are located in water depths ranging from 3,000 to 6,000 feet. Most of the targets are deep, sub-salt objectives.

"This agreement with BP solidifies our growing deep-water position in the Gulf of Mexico," said John Seitz, Anadarko President and Chief Operating Officer. "Even though we're a relative newcomer to the deep water, we have already built a strong exploration program, with one discovery in 2000 and four high-impact wells currently drilling.

"By partnering with BP in this area, we can leverage our sub-salt, shallow water expertise with BP's deep water experience to provide a greater range of drilling discovery opportunities for both companies," Seitz said. "We're already participating in drilling a deepwater Gulf of Mexico exploration well, Blues Image, with BP under a separate agreement, and we have partnered with them in other exploration areas, such as the foothills of Alaska and offshore Nova Scotia."

Also as part of the deal, BP has agreed to assign Anadarko its rights in eight blocks in the Green Canyon area near Anadarko's Marco Polo discovery on Block 608. Anadarko is currently working on development plans and options to commercialize this discovery. BP holds 100 percent of the 95 South Auger area blocks. The joint venture agreement gives Anadarko the option to earn a 33 to 66 percent working interest in these blocks. The remainder of blocks in the larger 640-block area of mutual interest are either unleased or have been leased by other companies.

Under the agreement, Anadarko will fund the licensing and reprocessing of 3-D seismic data using techniques such as pre-stack depth migration, which led the company to the Hickory, Tanzanite and Tarantula sub-salt discoveries. Anadarko will pay a disproportionately larger share of the first four wells drilled.