LNG

Anadarko Petroleum Corp. of the US has formally given the final investment decision and go-ahead for $20 billion of liquefied natural gas export project spending in Mozambique ahead of the Houston, Texas-based company’s takeover by Occidental Petroleum.

Chevron Corp. has pulled out of the bidding battle for Anadarko Petroleum and its Mozambique liquefied natural gas stake and US assets, leaving the way clear for Occidental Petroleum to acquire Anadarko and for French major Total to own the African and LNG assets.

Anadarko Petroleum Corp, the US domestic oil and gas operator and stakeholder in Mozambique LNG, said it intended to resume negotiations with Occidental Petroleum Corp. in response to its takeover offer valued at $38 billon.

The Anadarko statement follows its acceptance on April 11 of a takeover bid of $33Bln from Chevron Corp. and the signing of a formal merger agreement.

“Anadarko is resuming its earlier negotiations with Occidental because Anadarko's board of directors, following consultation with its financial and legal advisors, has unanimously determined that the Occidental proposal could reasonably be expected to result in a ‘superior proposal’ as defined in the Chevron merger agreement,” stated Anadarko.

“The Occidental proposal reflects significant improvement with respect to indicative value, terms and conditions, and closing certainty as compared to any previous proposal Occidental made to Anadarko,” it added.

Anadarko, whose headquarters are near Houston, is being target because of its strength in US shale production, especially in the Delaware Basin of Texas and New Mexico. Its other main US assets are in Colorado and the Gulf of Mexico.

It also owns valuable assets in deep water oil and LNG, including Anadarko’s planned onshore development in Mozambique which is advancing, according to its latest earnings statement.

The company remains positioned to take a final investment decision on Mozambique LNG in the first half of this year.

Analysts said the competition to acquire Anadarko may force Chevron to consider whether it should make a higher offer.

Analysts noted that Chevron is a substantial LNG player and operates two world-class plants in Western Australia and would fit with Anadarko’s development plans for Mozambique.

The $33Bln bid from Chevron and the $38Bln offer from Occidental would be valued at an additional $17Bln because of the scale of Anadarko’s debt commitments.

Occidental, a major North American chemicals manufacturer, has no LNG assets and is centred on US oil and gas as well as midstream, marketing and refining.

Anadarko Petroleum Corp., the company with US onshore assets and a valuable stake in Mozambique LNG, has received a rival take-over bid of $38 billion from Occidental Petroleum Corp. after accepting a $33Bln offer in mid-April from Chevron Corp.

The competition to acquire Anadarko is expected to force Chevron to consider whether it will make a counter-bid.

“Following unanimous approval from the company's board of directors on April 12, 2019, Anadarko entered into a definitive agreement with Chevron under which Chevron would acquire all of the outstanding shares of Anadarko in a stock and cash transaction valued at $33Bln, or $65 per share,” said Anadarko.

“In accordance with the terms of the Chevron Merger Agreement, and in consultation with its financial and legal advisors, Anadarko's board of directors will carefully review Occidental's proposal to determine the course of action that it believes is in the best interest of the company's stockholders,” added the company.

“The Anadarko board has not made any determination as to whether Occidental's proposal constitutes, or could reasonably be expected to result in, a superior proposal under the terms of the Chevron Merger Agreement,” said Anadarko.

“The Anadarko board expects to respond to Occidental's proposal upon completing its review, and accordingly reaffirms its existing recommendation of the transaction with Chevron,” it stated.

Anadarko said its stockholders were advised to take no action at this time.

Analysts pointed out that Chevron is a substantial LNG player and operates two world-class plants in Western Australia and would have fitted with Anadarko’s development plans for Mozambique LNG.

The $33Bln bid from Chevron and the $38Bln counter-offer from Occidental would both be valued at an additional $17Bln because of the scale of Anadarko’s debt commitments.

Anadarko said on April 12 it had accepted Chevron’s bid after rejecting an initial approach from Occidental that fell short of a full bid.

Occidental’s business has no LNG assets and is centred on US oil and gas as well as midstream, marketing and refining. Houston-based Occidental is also a major North American chemicals manufacture.

The Anadarko-led Mozambique venture will be the African nation’s first onshore development, initially consisting of two liquefaction Trains with total nameplate capacity of 12.9 million tonnes per annum with feed-gas coming from the Golfinho-Atum gas fields located within Anadarko’s offshore Area 1 licence of the Rovuma Basin.

The Mozambique plant is being built near the port of Pemba in the northeast Cabo Delgado Province, about 900 kilometres north of Beira.

The Anadarko venture already has supply deals with European utilities Centrica of the UK and French utility EDF, the Japanese utilities Tokyo Gas and Tohoku Electric and energy companies, Royal Dutch Shell, China National Offshore Oil Corp. and Bharat Petroleum of India.

Before the Chevron bid was accepted, Anadarko had been planning to seek long-term charters for around 16 LNG carriers to ship volumes to customers from Mozambique.

The Mozambique LNG project and natural gas assets would also add to Chevron’s global LNG given its volumes from Australia’s Gorgon plant on Barrow Island in Western Australia and the Wheatstone facility at Ashburton in the Pilbara region, both operated by Chevron.

Anadarko shareholders are being offered 0.3869 shares of Chevron and $16.25 in cash for each share, valuing the equity at a total of $33Bln.

Under the Occidental bid, Anadarko shareholders would receive $38.00 in cash and 0.6094 shares of Occidental common stock for each Anadarko share held.

Anadarko Petroleum has named former BG Group executive Mitch Ingram as Executive Vice President for International, Deepwater and Exploration to lead the US company’s overseas operations and project management, including the Mozambique LNG joint venture in southeast Africa.

Anadarko Petroleum Corp., one of the main participants in projects to develop liquefied natural gas production in Mozambique, is setting aside $150 million for spending on initial development of the onshore liquefaction plant planned for the southeast African nation.

Anadarko Petroleum, the US exploration and production company and one of the main developers of LNG in the southeast African nation of Mozambique, reported a second-quarter net loss $415 million, though cash flow came in at $857M from operations.

Anadarko Petroleum Corp., the US company with plans to develop LNG projects in the southeast African nation of Mozambique, has made executive changes to its US and international operations team leadership as it moves forward after the Colorado accident that led to a temporary shutdown of 3,000 wells in the state.

Anadarko Petroleum Corp., one of the main shareholders in world-class LNG projects being planned in the southeast African state of Mozambique, is likely to be unhindered in its future progress despite problems in its US operations that led to the shutdown of more than 3,000 producing wells after an accident.

Anadarko Petroleum, the US exploration and production company, said it expected to invest around $770 million in its deepwater and international exploration programme and onshore LNG project in Mozambique.