Anadarko Takes Long View Of West African Oil

HOUSTON, March 25, 2008 (Dow Jones Newswires)

Anadarko Petroleum Corp. is investing in deepwater oil production in West Africa for the long haul, says CEO Jim Hackett, despite recently selling similar offshore assets in other parts of the world.

On March 4, Anadarko sold its Peregrino oil field off the coast of Brazil and its stake in Kaskida, a large oil field in the deepwater Gulf of Mexico, to StatoilHydro ASA for $1.8 billion. That deal marked the end of a series of large asset sales aimed at paying down debt, Hackett said in an interview with Dow Jones.

The Mahogany field in Ghana is one of the few remaining Anadarko projects that will require large, multi-year development expenditures before any payoff. Anadarko has increasingly concentrated on assets that offer more stable, near-term production, including gas reserves in the U.S. Rockies and its Independence Hub, a giant web of Gulf of Mexico gas fields that began production last year. Devon Energy Corp., which is about the same size as Anadarko, sold its West African assets last year, claiming that they were too small and local government terms too unfavorable for it to compete effectively.

Unlike Peregrino, Anadarko's assets in Ghana are expected to produce higher-quality oil, will require relatively few development and production wells and are in shallower water, Hackett said. The sale of Peregrino also hinged on the strength of StatoilHydro's bid, he said.

"Peregrino was a great asset, but we got an offer for it that we couldn't refuse," he said.

As for Anadarko's size, Hackett said the company wants to stay in West Africa, but is likely to avoid Nigeria, where instability and government interference with gas production make it more difficult to operate.

Andarko plans to drill nine exploratory and appraisal wells in West Africa. The region is "an emerging core area for us," said Bob Daniels, Anadarko's senior vice president for worldwide exploration, at an investor conference in New York on Tuesday.

"Everything we've seen to date out here has been extremely positive," Daniels said.

Anadarko also has exploration operations in the deepwater Gulf of Mexico, Mozambique, Brazil, Southeast Asia and Alaska.

HOUSTON, March 25, 2008 (Dow Jones Newswires)