Bloomberg News

Anadarko Plans to Sell All Brazil Oil Blocks, ANP Says

October 04, 2011

(Updates with closing share price in final paragraph.)

Oct. 4 (Bloomberg) -- Anadarko Petroleum Corp., the largest U.S. independent oil and natural-gas company by market value, plans to sell all its blocks in Brazil, a director at the nation’s crude regulator said.

“Anadarko is taking the option to negotiate an exit from Brazil, it’s a business option,” Magda Chambriard, a director at the agency known as the ANP, told reporters today in Rio de Janeiro. “Anadarko did very good work in Brazil, making discoveries in exploration areas.”

Anadarko has about 1 million gross acres off Brazil’s coast and made four discoveries, including Wahoo and Itaipu. Those two finds have combined potential of at least 500 million barrels of oil equivalent, Anadarko has said. The company based in The Woodlands, Texas, may sell assets in Brazil as it works to develop projects off the coast of Africa and in the U.S.

“There’s no doubt” Anadarko is seeing more capital return in other areas than Brazil, John Gerdes, an analyst with Canaccord Genuity Corp. in Houston, said today in a telephone interview. “It’s not surprising. They haven’t really gained the substance of critical mass in the area.”

Gerdes has a “buy” rating on the stock.

Some oil reservoirs offshore Brazil are buried beneath layers of salt thousands of feet thick, known as pre-salt. Much of Anadarko’s projects have been in Brazil’s deep-water, pre- salt region.

John Christiansen, an Anadarko spokesman, declined to comment.

Citigroup, Morgan Stanley

The company previously sold an interest in the Peregrino field off Brazil to what’s now Statoil ASA for about $1.4 billion. Anadarko is working with Citigroup Inc., Morgan Stanley and Scotia Waterous to line up a possible transaction that may be valued at $3 billion to $5 billion, a person familiar with the potential sale said last week.

Anadarko’s plan to sell some or all of its properties in Brazil follows the national oil regulator’s approval in May of BP’s $3.2 billion purchase of Devon Energy Corp.’s exploration licenses in Brazil. The sale included Oklahoma City-based Devon’s stakes in Itaipu and Wahoo.

Brazil’s government hasn’t sold any exploration areas in the South American country for three years, increasing demand for existing licenses. Royal Dutch Shell Plc and Chevron Corp. sold stakes this month in exploration projects in Brazil.

Proved Reserves

Anadarko has said it’s seeking to have 3 billion barrels of proved reserves by the end of 2014, up from 2.4 billion at the end of 2010. The company is a partner in the Jubilee project off Ghana and plans to explore offshore countries including Sierra Leone, Liberia and Ivory Coast.

In North America, Anadarko has reported increased production in such formations as the Eagle Ford in Texas and the Marcellus Shale in Pennsylvania.

Independent oil and gas companies don’t own refining, chemical or retail fuel businesses.

Anadarko rose $1.03, or 1.7 percent, to $61.56 in New York Stock Exchange composite trading. The stock has dropped 19 percent this year.

--With assistance from Brett Foley in London and Edward Klump in Houston. Editors: Robin Saponar, Jessica Brice

To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net Carlos Manuel Rodriguez in Mexico City at carlosmr@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net.


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