Anadarko Petroleum

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Anadarko Petroleum Corporation
Public company
Traded asNYSEAPC
S&P 500 Index component
IndustryPetroleum industry
Founded1959; 60 years ago (1959)
Headquarters,
United States
Key people
Robert A. Walker, Chairman and CEO
Robert G. Gwin, President
ProductsPetroleum
Natural gas
Natural gas liquids
Production output
666 thousand barrels of oil equivalent (4,070,000 GJ) per day
RevenueIncrease $13.070 billion (2018)
Increase $0.752 billion (2018)
Total assetsDecrease $40.376 billion (2018)
Total equityDecrease $8.496 billion (2018)
Number of employees
4,700 (2018)
Websitewww.anadarko.com
Footnotes / references
[1]
Anadarko Petroleum Headquarters
An aerial view of Allison Tower and Hackett Tower, the two buildings that serve as the headquarters for Anadarko Petroleum Corporation.
Allison Tower, the headquarters of Anadarko Petroleum Company.
Anadarko, The Woodlands TX
Hackett Tower, Anadarko

Anadarko Petroleum Corporation is a company engaged in hydrocarbon exploration. It is organized in Delaware and headquartered in two skyscrapers in The Woodlands, Texas: the Allison Tower and the Hackett Tower, both named after former CEOs of the company.

The company has been the subject of multiple environmental cases, including the largest environmental contamination settlement in American history - the 2014 settlement related to the former Tronox subsidiary of Kerr McGee, a company purchased by Anadarko in 2006.[2]

The company is ranked 257th on the Fortune 500.[3]

In addition to exploration and production, the company engages in petroleum and natural gas gathering, processing, treating, and transportation. The company also participates in the hard minerals business through its ownership of non-operated joint ventures and royalty arrangements. As of December 31, 2018, the company had approximately 1.473 billion barrels of oil equivalent (9.01×109 GJ) of proved reserves, 45% of which was oil reserves, 37% of which was natural gas, and 18% was natural gas liquids. In 2018, the company produced 666 thousand barrels of oil equivalent (4,070,000 GJ) per day.[1]

The company’s operations in the United States accounted for 86% of total sales volumes during 2018 and 88% of total proved reserves at year-end 2018. In the United States, the company has major holdings in the Delaware Basin, where it has over 580,000 gross acres, primarily in the Cline Shale; the Denver Basin, where it has more than 400,000 net acres; operating 4,600 vertical wells and 1,400 horizontal wells, and in Greater Natural Buttes, Utah, where it has approximately 2,850 wells.[1]

The company’s international operations accounted for 14% of total sales volumes during 2018 and 12% of total proved reserves at year-end 2018. The company has holdings in Algeria, Ghana, Mozambique, Colombia, and Côte d’Ivoire.[1]

History[edit]

Anadarko was formed in 1959 as a subsidiary of Panhandle Eastern Corporation Pipe Line Company after the discovery of large amounts of natural gas in the Anadarko Basin, which underlies the western part of the state of Oklahoma and the Texas Panhandle, and extending into southwestern Kansas and southeastern Colorado.

In 1986, Panhandle Eastern Corporation distributed its interests in Anadarko to its shareholders via a corporate spin-off and Anadarko became a public company.[4]

In 1999, the company purchased a 7.5-acre (30,000 m2) tract in The Woodlands, Texas from the Woodlands Land Company to build an 800,000-square-foot (74,000 m2), 32-story headquarters building, on the site.[5] In 2012, the company began construction of another office tower adjacent to its headquarters.[6] The company named its two office towers after former CEOs.[7] The buildings were completed in 2014.[8]

In April 2000, the company acquired Union Pacific Resources in a $4.4 billion transaction.[9][10]

In June 2001, the company acquired Berkeley Petroleum Corporation for C$1.2 billion plus the assumption of C$400 million in debt.[11]

In December 2003, Robert J. Allison, Jr. resigned as chief executive officer and would be replaced by James T. Hackett, previously the chief operating officer of Devon Energy.[12]

In June 2006, the company acquired Western Gas Resources in a $5.3 billion cash transaction.[13]

In August 2006, the company completed the acquisition of Kerr-McGee for $16 billion in cash.[14][15]

In January 2007, the company sold assets in West Texas for $1 billion.[16]

In February 2007, the company sold assets in Oklahoma and Texas for $860 million.[17]

In December 2008, the company sold its 50% interest in the Peregrino heavy oil field offshore Brazil to Statoil for $1.4 billion.[18]

In January 2012, the company sold midstream assets to Western Gas Partners for $483 million.[19]

In January 2012, the company announced a major natural gas find offshore Mozambique.[20]

In 2015, the company made an offer to acquire Apache Corporation, but the offer was rejected.[21]

In February 2016, the company sold its interest in the Springfield oil and gas gathering system, near the Eagle Ford shale, for $750 million to Western Gas Partners.[22]

In March 2016, the company announced layoffs affecting 1,000 employees, or 17% of its staff. The layoffs were the result of weak commodity prices.[23]

In December 2016, the company acquired assets in the Gulf of Mexico from Freeport-McMoRan.[24] The company also announced the sale of its assets in the Marcellus Shale.[25]

In January 2017, the company sold its assets in the Eagle Ford to Sanchez Energy and The Blackstone Group for $2.3 billion.[26]

In April 2019, Chevron Corporation announced their intention to acquire Anadarko for $33 billion.[27] A counter bid was entered by Occidental Petroleum that was higher in price and contained more cash than the Chevron's announced offer. [28] On May 9, Anadarko entered into a definitive merger agreement with Occidental.[29]

Environmental record[edit]

Anadarko has been ranked as among the 14th best of 92 oil, gas, and mining companies on indigenous rights and resource extraction in the Arctic.[30]

Deepwater Horizon Oil spill involvement[edit]

Anadarko owned a 25% non-operating minority interest in the Macondo Prospect, which was 65% owned and operated by BP, and was affected by the Deepwater Horizon oil spill.[31]

Settlement with BP[edit]

Anadarko Petroleum in Gillette, Wyoming

In early 2010, BP billed Anadarko more than $272 million as a partial payment for its share of cleanup and response costs in the Gulf, according to a bill that was sent by BP and obtained by Talking Points Memo. Anadarko publicly suggested that it will not pay for costs associated with the oil disaster, claiming in a statement that BP was guilty of gross negligence or willful misconduct. Under the joint operating agreement, Anadarko was required to pay its 25% share of costs related to any incident—unless that incident was caused by its partner's gross negligence or willful misconduct.[32]

In May 2011, MOEX Offshore, a subsidiary of Mitsui and owner of a 10% non-operating ownership interest in the Macondo Prospect, settled claims with BP for $1.07 billion.[33]

In October 2011, Anadarko settled all claims with BP for $4 billion. Anadarko also transferred its 25% stake in Mississippi Canyon Block 252 (Macondo Prospect) to BP and was indemnified by BP for all costs related to the oil spill, including those arising under the Oil Pollution Act of 1990.[34][35]

Fine under the Clean Water Act[edit]

In December 2015, U.S. District Judge Carl Barbier ordered Anadarko to pay a civil fine under the Clean Water Act of $159.5 million, or $50 per barrel of oil spilled as a result of the Deepwater Horizon drilling rig explosion.[31] The judge stated Anadarko was not at fault for the spill, but the company's 25% ownership stake made it responsible. Barbier wrote that the $159.5 million fine "strikes the appropriate balance between Anadarko's lack of culpability and the extreme seriousness of this spill."[31] The fine came after BP and Anadarko had unsuccessfully appealed to the U.S. Supreme Court to reject Judge Carl Barbier's finding of negligence in the Deepwater Horizon accident.[36]

Anadarko from Lake Robbins Drive

Tronox litigation and settlements[edit]

In April 2014, Anadarko settled with the U.S. Department of Justice and the Environmental Protection Agency to pay $5.15 billion to clean up environmental waste sites around the country. It was the largest environmental contamination settlement in American history.[37]

The environmental contamination sites were inherited by Anadarko after it purchased Kerr-McGee in 2005. As background, in 2006, Kerr-McGee spun off its Tronox subsidiary to offload 70 years of environmental dumping of toxic waste across 22 states beginning in the 1920s. The environmental damages included polluting Lake Mead in Nevada with rocket fuel, leaving behind radioactive waste piles throughout the territory of the Navajo Nation and dumping carcinogenic creosote in communities throughout the East, Midwest and South at its wood-treating facilities.[2] According to one report, "Kerr-McGee, rather than pay for the environmental mess it created, decided to shift the liabilities between 2002 and 2006 into Tronox. Kerr-McGee, meanwhile, kept its valuable oil and gas assets."[2] Anadarko then purchased the "clean" portion of Kerr-McGee free of its legacy of environmental dumping.

Lawsuit from Tronox shareholders[edit]

In 2009, shareholders of Tronox sued Anadarko, as successor to Kerr-McGee, for having misled investors about the large environmental and other debts Tronox would inherit from Kerr-McGee.[38]

Lawsuit from the Environmental Protection Agency and Department of Justice[edit]

The United States Department of Justice, on behalf of the United States Environmental Protection Agency, sued Anadarko for $25 billion.[39]

In April 2014, the parties reached a $5.15 billion settlement with Anadarko in the largest environmental contamination settlement in American history.[37][2]

References[edit]

  1. ^ a b c d "Anadarko Petroleum Corporation 2018 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  2. ^ a b c d Tucker, Eric (April 3, 2014). "US reaches $5.15 billion environmental settlement". San Diego Union Tribune. Associated Press.
  3. ^ "Fortune 500: Anadarko Petroleum". Fortune.
  4. ^ "Panhandle Plans Anadarko Spinoff". The New York Times. August 21, 1986.
  5. ^ "Anadarko to Build New HQ". Natural Gas Intel. February 11, 1999.
  6. ^ Dawson, Jennifer (January 19, 2012). "Anadarko building new office tower". American City Business Journals.
  7. ^ Feser, Katherine (June 22, 2013). "Deal of the week: Anadarko towers carry names of two past CEOs". Houston Chronicle.
  8. ^ Peyton, Lindsay (June 25, 2013). "Anadarko towers symbolize business growth in The Woodlands". Houston Chronicle.
  9. ^ "Anadarko to Merge With Union Pacific Resources Group" (Press release). PR Newswire. April 4, 2000.
  10. ^ "ANADARKO TO BUY UNION PACIFIC RESOURCES". The New York Times. April 4, 2000.
  11. ^ PIEPUL, ROBERT (June 23, 2006). "Anadarko to buy Berkley Petroleum for $1 billion, thwarting Hunt's bid". Oil & Gas Journal.
  12. ^ "Anadarko Names James T. Hackett President and CEO" (Press release). Business Wire. December 3, 2003.
  13. ^ "Anadarko to Acquire Kerr-McGee Corporation & Western Gas Resources, Inc. in Separate Transactions Totaling $23.3 Billion" (Press release). Business Wire. June 23, 2006.
  14. ^ "Anadarko Completes Kerr-McGee Acquisition; Combination Creates Leading Positions in Two of North America's Most Prolific Producing Regions; Portfolio to Be Optimized Through Asset Sales" (Press release). Business Wire. August 10, 2006.
  15. ^ "Anadarko Acquires Kerr-McGee, Western Gas Resources in Deals Totaling About $20B". Fox News. Associated Press. June 23, 2006.
  16. ^ "Anadarko Reaches Agreement on Divestiture of West Texas Fields" (Press release). Business Wire. January 18, 2007.
  17. ^ "Anadarko Announces Sale of Natural Gas Assets in Oklahoma and Texas" (Press release). Business Wire. February 2, 2007.
  18. ^ "Anadarko Closes Peregrino Sale" (Press release). Business Wire. December 10, 2008.
  19. ^ "Western Gas Partners Completes Acquisition of Midstream Assets from Anadarko" (Press release). Business Wire. January 16, 2012.
  20. ^ "Anadarko hits major Mozambique gas find". American City Business Journals. January 17, 2012.
  21. ^ Murtaugh, Dan; Carroll, Joe (November 11, 2015). "Anadarko Withdraws Offer to Buy Apache After Terms Were Rejected". Bloomberg L. P.
  22. ^ "Western Gas Announces Acquisition And Fourth-Quarter And Full-Year 2015 Results" (Press release). PR Newswire. February 24, 2016.
  23. ^ "Anadarko Petroleum to lay off big chunk of its workforce". American City Business Journals. March 10, 2016.
  24. ^ "Anadarko Closes Deepwater Gulf of Mexico Acquisition and Raises Oil-Growth Expectations" (Press release). PR Newswire. December 15, 2016.
  25. ^ "Anadarko Announces Sale Of Marcellus Shale Natural Gas Assets" (Press release). PR Newswire. December 21, 2016.
  26. ^ "Anadarko Announces Sale Of Eagleford Shale Assets" (Press release). PR Newswire. January 12, 2017.
  27. ^ "Chevron Announces Agreement to Acquire Anadarko" (Press release). April 12, 2019.
  28. ^ https://www.cnbc.com/2019/04/12/occidental-bid-more-than-70-a-share-for-anadarko-and-is-now-considering-options-sources.html?__source=newsletter%7Ceveningbrief
  29. ^ https://www.marketwatch.com/press-release/anadarko-agrees-to-be-acquired-by-occidental-2019-05-09
  30. ^ Overland, Indra (2016). "Ranking Oil, Gas and Mining Companies on Indigenous Rights in the Arctic". ResearchGate. Arran. Retrieved 2 August 2018.
  31. ^ a b c Stemple, Jonathan (December 1, 2015). "Anadarko ordered to pay $159.5 million fine for 2010 Gulf spill". Reuters.
  32. ^ Slajda, Rachel (June 30, 2010). "Exclusive: BP Bills Anadarko $272 Million In Gulf Spill Response". Talking Points Memo.
  33. ^ "BP announces settlement with Moex/Mitsui of claims between the companies related to the Deepwater Horizon accident" (Press release). May 20, 2011.
  34. ^ Robert, Daniel (October 17, 2011). "Anadarko and BP settle Deepwater Horizon dispute". MarketWatch.
  35. ^ "BP, Anadarko settle Gulf oil spill disaster claims". The Times-Picayune. Associated Press. October 17, 2011.
  36. ^ Hurley, Lawrence (June 29, 2015). "U.S. Supreme Court rejects BP, Anadarko over Deepwater Horizon spill penalties". Reuters.
  37. ^ a b "Case Summary: Settlement Agreement in Anadarko Fraud Case Results in Billions for Environmental Cleanups Across the Country". United States Environmental Protection Agency. November 10, 2014.
  38. ^ "Investors: Statement by Tronox Limited Regarding Tronox vs. Anadarko Settlement" (Press release). Tronox. April 3, 2014.
  39. ^ Kary, Tiffany (May 1, 2012). "Anadarko Fights Ailing Preacher in $25 Billion EPA Toxic Lawsuit". Bloomberg L.P.

External links[edit]