Brazilian Offshore Assets up for Grabs


Anadarko Petroleum (NYS: APC) can't miss lately. The Houston-based company recently announced terrific results from an appraisal well in its offshore Ghana stake. The news came a day after Anadarko's announcement from the other side of the continent, where it had successfully drilled its seventh well in a block offshore Mozambique.

The Mozambique well is located in Mozambique's Offshore Area 1 field, the site of Anadarko's massive natural gas discovery last year. The company estimates that the field contains more than 15 trillion cubic feet of natural gas, and early well results support that claim.

It is estimated that it will take $10 billion in investments to produce the field's natural gas. Anadarko is the largest among six stakeholders in the field and has already implied it may consider monetizing some of its share. Too much success in exploration often results in a sale before production begins. That plan is already under way with Anadarko's Brazilian offshore assets.

Assets for sale
Anadarko has about a million gross acres in seven exploration blocks that make up its assets offshore Brazil. The company has made four discoveries, one of them in the notable Campos Basin, which contains 300 million barrels of oil.

Analysts estimate that Anadarko will sell its Brazilian business for $3 billion to $4 billion sometime this year.

Who has that kind of money?
The three players most interested in the assets right now are Maersk, Statoil (NYS: STO) , and Total (NYS: TOT) . All three companies currently have offshore operations in Brazil:

  • Maersk: In Brazil since 2007, the company operates two offshore blocks with a 50% stake in each.

  • Statoil: Bought Anadarko's stake in the Peregrino field in 2008 for $1.4 billion. Currently holds a 60% stake in that field with seven exploration licenses.

  • Total: Holds interests in three exploration blocks in the pre-salt Santos Basin, which is estimated to hold 50 billion barrels.

Given Statoil's recent flurry of exploration activity, I would be surprised if they picked up these assets as well, though I suppose stranger things have happened.

Foolish takeaway
Anadarko is one of the world's largest independent oil and gas explorers, but it still must live within its means. Selling its Brazilian assets will take a huge project off its plate and free up capital to fund its work in Africa, and perhaps serve as a bit of a parachute in the ongoing BP Deepwater Horizon litigation.

Keep an eye on Anadarko's asset sale by adding the companies above to My Watchlist. If you are looking for more ideas, The Motley Fool has created a new special oil report titled "3 Stocks for $100 Oil," which you can download today, absolutely free. In this report, Fool analysts cover three outstanding oil companies, including the stock Fool analyst David Lee Smith calls the "energy king." To get instant access to the names of the three oil stocks, click here -- it's free.

At the time thisarticle was published Fool contributorAimee Duffyowns shares of Statoil A, but she holds no other position in any company mentioned.If you have the energy, check out what she's keeping an eye on by following her on Twitter, where she goes by@TMFDuffy.Motley Fool newsletter serviceshave recommended buying shares of Total and Statoil A. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.