Anadarko Petroleum to move cash out of international arena

Anadarko Petroleum plans to shift some investment from the international arena to areas with better track records, including onshore U.S. Lower 48, Robert Allison, Anadarko’s chief executive officer, said Nov. 6 at the Merrill Lynch Global Energy Conference in New York.

“We’ve taken a hard took at our portfolio projects,” Allison said. “It’s become clear that we’ve been chasing too many international ideas with too little focus, too little commitment and too little success.”

He said that while Anadarko would continue to maintain a strong international program, “it will be more focused than it has been in the recent past. And we plan to spread the risk by taking on more partners. Foreign exploration will be by design, not by default.”

Allison did not identify any of the projects that would be getting less cash and attention from the big independent. The company’s published list of international frontier areas includes Australia, Gabon, Tunisia, Black Sea and North Atlantic. The company also operates in Canada, Qatar and Venezuela.

“Where you invest your time and money can have a big impact on your finding costs and reserve replacement, as well as your level of overhead,” Allison said.

Algeria, Alaska and the Texas Bossier play are among Anadarko’s “long-lived legacy assets,” where production levels can be easily maintained and ultimately increased through additional exploration and field exploitation, Allison said.

But he said Anadarko would continue to “tweak” its portfolio, noting that over the past several years the company each year has sold $100-to $200 million in properties while purchasing assets of roughly the same amount.

“For us acquisitions are not about buying existing production, but they are about buying high potential drilling and potential upside,” Allison said.