London — The US hydrocarbon company Occidental Petroleum has put in a counter offer to buy Anadarko Petroleum for 38 billion US dollars, a twenty per cent increase on the offer made earlier this month by the US giant Chevron.
The offer by Chevron has been accepted by Anadarko’s management and accepting the new proposal would require Anadarko to pay a breakup fee of one billion dollars.
According to a statement from Occidental, the company “believes its proposal is superior both financially and strategically for Anadarko’s shareholders, creating a global energy leader with the scale and geographic diversification to drive growth and deliver compelling value and returns to the shareholders of both companies”.
It added that “the combined company will be uniquely positioned to leverage Occidental’s demonstrated operational and technical expertise, producing greater anticipated synergies than Anadarko’s pending transaction”.
Occidental’s offer is based on half cash and half stock whilst Chevron was offering 75 per cent in stock and 25 per cent in cash.
According to the company’s chief executive officer, Vicki Hollub, “Occidental is a leader in using technological innovation to create value, and we will deploy our expertise to enhance the performance and productivity of Anadarko’s assets globally”.
In Mozambique, Anadarko is the operator of Offshore Area One in the Rovuma Basin, off the coast of the northern province of Cabo Delgado, where reserves of at least 75 trillion cubic feet of gas are known to exist. It is also leading the project to construct two gas liquefaction plants (known as “trains”) to produce 12.88 million tonnes of liquefied natural gas (LNG) a year.
Anadarko has steadily been putting in place binding Sale and Purchase Agreements to cover the future production of LNG, and it was expected to take the Final Investment Decision in April to go ahead with the project known as Mozambique LNG1. Currently, Anadarko holds 26.5 per cent of the shares in the Offshore Area One consortium. Its partners are Mitsui of Japan (20 per cent), PTT of Thailand (8.5 per cent), three Indian companies ONG Videsh, BEAS Rovuma Energy and BPRL Ventures (10 per cent each), and Mozambique’s own National Hydrocarbon Company, ENH (15 per cent).
Chevron is now expected to weigh up increasing its offer to counter the Occidental bid.