LNG

Saipem, the Italian engineering and subsea company working on feed-gas projects for Mozambique LNG, welcomed the added security of the arrival in waters offshore the southeast African nation of a French naval frigate.

Anadarko Petroleum Corp., the US energy company in the midst of a takeover duel between Chevron Corp. and Occidental Petroleum, reported a net loss in its first-quarter earnings, though this was offset by advances made in its Mozambique LNG export project.

The company, whose headquarters are near Houston, reported a net loss of $15 million with one-off charges of $274M amid total cash flow of $1.12 billion, lower than the 1.43Bln posted in the same quarter of 2018.

Anadarko's first-quarter 2019 sales of oil, natural gas and natural gas liquids totaled 64 million barrels of oil equivalent, or an average of 715,000 barrels per day and which included 412,000 barrels of oil.

Anadarko is the subject of the takeover bids 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 continued to make significant progress with its Mozambique LNG project, announcing Sale and Purchase Agreements (SPAs) now totaling more than 9.5 million tonnes per annum (MTPA), with two additional SPAs in the final stages of execution that, if executed, would bring the total volume to more than 11 MTPA,” said Anadarko.

“During the quarter, the project also was designated as the first mover by the Government of Mozambique for the marine facilities to support the onshore LNG industry in Mozambique,” it added.

“The company remains positioned to take a final investment decision during the first half of this year,” stated Anadarko.

In the past week, Anadarko received a take-over offer of $38 billion from Occidental after accepting a $33Bln offer in mid-April from Chevron.

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

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

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.

Anadarko had 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, 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.

The Anadarko-led Mozambique venture will be the African nation’s first onshore development, initially consisting of two liquefaction Trains.

The feed-gas will come 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.

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.

Chevron Corp., the second-largest US oil and gas company and a leading participant in the LNG market with two plants in Western Australia, has agreed a $50 billion deal to buy US energy company Anadarko Petroleum, one of America’s leading independent producers and a key stakeholder in Mozambique LNG assets.