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Anadarko could sale its Venezuela assets
Petroleumworld
CARACAS
Petroleumworld.com 11 10 06
Anadarko Petroleum Corp. (APC) said it is still considering the sale of assets in Venezuela and warned of a possible impairment charge in the fourth quarter following the formation of a new company in which to house them.
The Houston-based company said in its 10Q report, released Thursday, that it is "currently analyzing its options, including a possible sale" of the assets. It continues Anadarko's program of asset swaps and divestitures to reduce the debt incurred in its $21.1 billion takeover of Kerr-McGee Corp. and Western Gas Resources in August.
Anadarko recently sold its Canadian properties for $4.2 billion and entered an agreement with Statoil ASA (STO) to sell its Knotty Head and Big Foot Gulf of Mexico discoveries for $901 million. It is also evaluating bids for its Genghis Khan deepwater project in the Gulf.
Anadarko's interests in Venezuela, according to its 2005 annual report, include a 45% stake in the Oritupano-Leona contract area. In 2005, the company's net oil sales volumes from the 395,000 acre area totaled 5 million barrels.
The company's Venezuelan interests contribute only a modest portion of Anadarko's earnings. For the nine months to September 30, they represented about 1% of its income from continuing operations before income taxes.
The assets had been governed by an Operating Service Agreement (OSA), but that was likely to change after the Venezuelan Government in 2005 declared certain OSAs, including Anadarko's, were subject to renegotiation.
In March, Anadarko executed a memorandum of understanding with Venezuela's national oil company, Petroleos de Venezuela S.A., also known as PDVSA (PVZ.YY), PDVSA affiliate Corporacion Venezolana del Petroleo, and its joint venture partner Petrobras to convert the OSA into a new company in which Anadarako will have an 18% stake.
In its 10K report, Anadarko said the final contracts covered by the memorandum of understanding was approved by Venezuela's National Assembly and were executed in October.
It also said that a change in its accounting method to deal with the termination of the OSA and its new interest in the company meant it could incur a partial impairment of its investment in the fourth quarter of 2006.
"The company is still analyzing the need for impairment and is currently unable to determine the extent of such loss," it said.
Petroleumworld 09 11 06Copyright© 2006 Petroleumworld. All Rights Reserved.
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