Anadarko Petroleum

Anadarko Petroleum Corporation

Type	Public company
Traded as	NYSE: APC S&P 500 Component
Industry	Petroleum industry
Founded	1959
Headquarters	Allison Tower The Woodlands, Texas, U.S.
Key people	R. A. Walker, Chairman, President, & CEO Robert G. Gwin, Executive Vice President & CFO[1]
Products	petroleum, natural gas, and natural gas liquids
Production output	792 thousand barrels of oil equivalent (4,850,000 GJ) per day[1]
Revenue	US$8.447 billion (2016)[1]
Operating income	-US$2.599 billion (2016)[1]
Net income	-US$3.071 million (2016)[1]
Total assets	US$45.564 billion (2016)[1]
Total equity	US$12.212 billion (2016)[1]
Number of employees	4,500 (2016)[1]
Website	Anadarko.com

Allison Tower, the headquarters of Anadarko Petroleum Company.

Anadarko Petroleum Corporation is an American petroleum and natural gas exploration and production company headquartered in The Woodlands, Texas.^[2] The company is headquartered in two skyscrapers in The Woodlands, Texas: the Allison Tower and the Hackett Tower, both named after former CEOs of the company. The buildings were completed in 2014.^[3]

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.^[4][4]

Current Operations

In addition to exploration and production, the Company engages in the gathering, processing, and treating of natural gas, and the transporting of natural gas, crude oil, and natural gas liquids. The Company also participates in the hard minerals business through its ownership of non-operated joint ventures and royalty arrangements.^[1]

As of December 31, 2016, the company had approximately 1.722 billion barrels of oil equivalent (1.053×10¹⁰ GJ) of proved reserves, 52% of which were liquids and 48% of which were natural gas. In 2016, the company produced 792 thousand barrels of oil equivalent (4,850,000 GJ) per day.^[1]

United States

The company’s operations in the United States accounted for 89% of total sales volumes during 2016 and 90% of total proved reserves at year-end 2016.^[1]

In the United States, the company has major holdings in the:

• Rocky Mountains:
  • Wattenberg Gas Field - approximately 5,000 vertical wells and 1,000 horizontal wells^[1]
  • Laramie County, Wyoming / Denver-Julesburg Basin - more than 350,000 net acres; operating 5,200 vertical wells and 1,220 horizontal wells^[1]
  • Greater Natural Buttes, Utah - approximately 2,930 wells^[1]
  • Powder River Basin - over 325,000 acres of deep mineral rights^[1]
  • Greater Green River Basin - operates 960 wells^[1]
• Southern and Appalachia Region
  • Delaware Basin - over 580,000 gross acres; producing wells are primarily in the Cline Shale^[1]
  • Eagle Ford - 346,000 gross acres and over 1,300 producing wells^[1]
  • Eaglebine / Austin Chalk - 172,000 gross acres^[1]
  • East Texas / North Louisiana - 223,000 gross acres^[1]
  • Marcellus Shale - 195,000 net acres^[1]
• Gulf of Mexico - average working interest of 70% in 327 blocks
• Alaska North Slope

International Operations

The company’s international operations accounted for 11% of total sales volumes during 2016 and 10% of total proved reserves at year-end 2016.^[1]

The company has holdings in:

• Algeria - Sahara Desert Blocks 404 and 208^[1]
• Ghana - offshore in the West Cape Three Points Block and the Deepwater Tano Block^[1]
• Mozambique - Offshore Area 1^[1]
• Colombia - 9 blocks totaling approximately 16 million gross acres^[1]
• Côte d’Ivoire - 4 offshore blocks totaling approximately 1.0 million gross acres^[1]
• New Zealand - 4 blocks totaling approximately 42 million gross acres^[1]
• Kenya - 45% working interest in 3 offshore deepwater blocks, encompassing approximately 3.7 million gross acres^[1]
• Brazil - approximately 300,000 gross acres in 2 offshore blocks^[1]

History

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 Texas Panhandle and Oklahoma Panhandle, and southwest Kansas.

In 1986, Panhandle Eastern Corporation distributed its interests in Anadarko to its shareholders via a corporate spin-off in 1986.^[5]

In 1999, the company announced that it would purchase a 7.5-acre (30,000 m²) tract in The Woodlands, Montgomery County, Texas from the Woodlands Land Company and build an 800,000-square-foot (74,000 m²), 32-story headquarters building, on the site.^[6] In 2012, the company announced that it would construct another office tower adjacent to its headquarters.^[7] The company announced that it will name its two office towers after former CEOs.^[8]

In 2003, the company announced that Robert J. Allison, Jr. was resigning as chief executive officer and would be replaced by James T. Hackett, previously the chief operating officer of Devon Energy.^[9] In 2012, the company announced a major natural gas find offshore Mozambique.^[10]

Acquisitions and sales

• In 2000, the company acquired Union Pacific Resources in a $4.4 billion transaction.^[11][12]

• In 2001, the company acquired Berkeley Petroleum Corporation for C$1.2 billion plus the assumption of C$400 million in debt.^[13]

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

• In 2006, the company purchased Western Gas Resources in a $5.3 billion cash transaction.^[16]

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

• In 2015, the company made an offer to acquire Apache Corporation, but the offer was rejected.^[18]

• In 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.^[19] 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.^[20]

Environmental record

Deepwater Horizon Oil spill involvement

Anadarko owned a 25% non-operating minority interest in the Macondo Prospect, which was owned 65% by and operated by BP and was affected by the Deepwater Horizon oil spill.^[21]

Settlement with BP

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.^[22]

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.^[23]

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.^[24][25]

Fine under the Clean Water Act

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.^[21] 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."^[21] 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.^[26]

Tronox litigation and settlements

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.^[27]

The environmental contamination sites were inherited by Anadarko after it purchased Kerr-McGee in 2005. As background, Kerr-McGee had 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.^[4] 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."^[4] Anadarko then purchased the "clean" portion of Kerr-McGee free of its legacy of environmental dumping.

Lawsuit from Tronox shareholders

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.^[28][29]

Lawsuit from the Environmental Protection Agency and Department of Justice

The U.S. Department of Justice, on behalf of the Environmental Protection Agency, sued Anadarko for $25 billion.^[30]

In April 2014, the U.S. Department of Justice, on behalf of the Environmental Protection Agency, reached a $5.15 billion settlement with Anadarko in the largest environmental contamination settlement in American history.^[27][4]

References

External links

• Official website

• • Business data for Anadarko Petroleum: Google Finance
  • Yahoo! Finance
  • Reuters
  • SEC filings
• Marcellus shale activity and violations as collected by FrackTrack

Deepwater Horizon oil spill
Events	Deepwater Horizon explosion Volume and extent Efforts to stem the spill Timeline May 2010 June 2010 July 2010 August 2010
Companies and organisations	Owners Anadarko Petroleum BP Mitsui Oil Exploration Major contractors Cameron International Halliburton Nalco Holding Company Transocean Wild Well Control Other Bureau of Ocean Energy Management Flow Rate Technical Group Minerals Management Service National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling Unified Command U. S. Coast Guard Worst Case Discharge
People	BP Bob Dudley Tony Hayward Doug Suttles Carl-Henric Svanberg Darryl Willis MMS S. Elizabeth Birnbaum Michael R. Bromwich Chris Oynes U.S. Coast Guard Thad Allen Mary Landry James A. Watson Paul F. Zukunft Other Kenneth Feinberg
Places	Macondo Prospect Mississippi Canyon Perdido Pass
Vessels	Drilling Deepwater Horizon Relief ships/ rigs Development Driller III Discoverer Clear Leader Discoverer Enterprise GSF Development Driller II Helix Producer 1 Loch Rannoch Mighty Servant 3 Overseas Cascade Q4000 Seacor Lee Toisa Pisces A Whale Pacific Responder California Responder
Reactions and impact	Environmental Environmental impact Health consequences GuLF Study Socio-economic Deepwater drilling moratorium court case Economic effects Investigation Litigation Response fund
Other	If God Is Willing and da Creek Don't Rise (2010 documentary) "Coon 2: Hindsight" (2010 South Park episode) Deepwater Horizon (2016 film) Hornbeck Offshore Services LLC v. Salazar Spillcam Wendy Schmidt Oil Cleanup X Challenge United States offshore drilling debate
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