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Hanley: Alaska a growth area for Anadarko
Ray Tyson Petroleum News Houston Correspondent
Anadarko Petroleum says Alaska is a growth area for the big exploration and production independent, despite a companywide realignment of E&P activities that spawned rumors of a pull back on the North Slope.
The fact Anadarko Alaska was not included in a $2.5 billion property divestiture program in North America alone should demonstrate that the Houston-based company is not in an asset-cutting mode in Alaska, Anadarko Alaska spokesman Mark Hanley said in an October 2004 interview with Petroleum News. (See latest Alaska update in the Anadarko/Kerr-McGee story on page A6.)
“We’re not divesting of anything in Alaska and that should indicate to you that there is an interest in staying here,” Hanley asserted. “In fact, since that decision was made we participated in at least one lease sale, and I suspect you’ll see us participating in more lease sales.”
Fueling the rumor was an 80 percent reduction in Anadarko’s Anchorage staff, followed by a strong indication from the company that it would not be drilling a well of its own on the slope this winter.
“Because we were not drilling a well this winter, they weren’t going to let these guys just sit up here and not have anything to do,” Hanley explained. “I fully expect that if we get a program going that we will see some people up here again.”
However, as winter approached, Anadarko was still in the process of devising a multi-year drilling program and specifically looking for a partner to help shoulder the cost of exploring its Jacob’s Ladder oil prospect. Hanley said it was just too late in the year to plan for any well this winter. Partnership with ConocoPhillips changes “We’re working right now on partners and strategies,” he added, “and I would say the hope is to be able to start the program the following winter, but we’ll see where that goes.”
Both Hanley and Jim Hackett, Anadarko’s chief executive officer, made it clear that the company intends to fulfill its drilling and operational obligations on acreage shared and operated by ConocoPhillips, Anadarko’s partner for more than a decade on the North Slope. However, the commitment comes with a slightly new twist.
“We decided not to double up on G&A (general and administrative) costs to help them,” Hackett told analysts at the Lehman Brothers energy conference in September 2004. “We’ve decided to let them do that. In Alaska, ConocoPhillips … has looked out for our interests. We’ve proved it over the years.” That means Anadarko is doing “a little less double checking” or “looking over their shoulder,” particularly on drilling operations, Hanley explained.
“But we still have our technical people doing work alongside them (in Houston) on the exploration side, looking at prospects and evaluating them,” he added. Waiting for gasline On the natural gas side, Anadarko’s decision to wait for regulatory and construction approvals for a major pipeline to carry North Slope gas to the U.S. Lower 48 before launching a drilling program on its North Slope Foothills acreage also has fueled speculation over the company’s future in Alaska.
“It’s more of a strategic hold and see position,” Hanley said. “We think we have some good potential. But obviously, until we see a gas line, it’s pretty hard to invest much more money in going out there and drilling prospects.” Selling off unwanted assets By the middle of September, Anadarko also had signed agreements to sell roughly $2.3 billion worth of unwanted oil and gas properties in the Gulf of Mexico, onshore Lower 48 and Canada, bringing the company close to its $2.5 billion divestiture goal.
Anadarko’s new strategy largely entails using profits from proven “foundation assets” onshore U.S. and Canada to fuel “growth platforms” in deepwater Gulf of Mexico, Algeria and Qatar, the company said.
“The divestiture of non-strategic properties allows Anadarko to focus on areas that have consistently produced the best results for us, as well as new growth areas,” Hackett added.
Although Alaska was not included in Anadarko’s divestiture package, Hackett made no mention of the North Slope being a growth area for the company.
“Frankly, if we weren’t interested in Alaska we would have divested as part of the whole divestiture,” Hanley said. “So I think (this) should give you a signal that after having gone through a full review of all the company’s assets, we are considered a growth asset within the company. That alone should suggest to you that it’s something we want to develop.”
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