Anadarko Petroleum
| Company type | Public |
|---|---|
| Industry | Hydrocarbon exploration and production |
| Founded | 1959 |
| Headquarters | The Woodlands, Texas , United States |
Area served | United States and international (Algeria, Ghana, Mozambique, Colombia, Côte d’Ivoire) |
Key people | Al Walker (Chairman and CEO, 2013) |
| Products | Petroleum, natural gas, natural gas liquids, hard minerals (via joint ventures and royalty agreements) |
| Parent | Occidental Petroleum (since 2019) |
Anadarko Petroleum Corporation operated as a hydrocarbon exploration enterprise, incorporated in Delaware and based in The Woodlands, Texas, with its headquarters spanning two towers—Allison Tower and Hackett Tower—named to honor previous chief executives. In 2019, the company was purchased by Occidental Petroleum.
The firm encountered substantial environmental legal challenges, notably settling the largest environmental contamination case in U.S. history in 2014, connected to the former Tronox subsidiary of Kerr McGee, which Anadarko had acquired in 2006.
In addition to its core exploration and production activities, Anadarko was involved in the gathering, processing, treatment, and transportation of petroleum and natural gas. The company also maintained interests in the hard minerals sector through non-operated joint ventures and royalty agreements. By December 31, 2018, Anadarko’s proved reserves consisted of approximately 45% oil, 37% natural gas, and 18% natural gas liquids. Its average production in 2018 was per day.
At the close of 2018, U.S. operations represented 86% of sales volumes and accounted for 88% of proved reserves. Significant holdings included over 580,000 gross acres within the Delaware Basin (mainly in the Cline Shale), more than 400,000 net acres in the Denver Basin with a total of around 4,600 vertical wells and 1,400 horizontal wells, along with roughly 2,850 wells located in Greater Natural Buttes, Utah.
Internationally, Anadarko’s footprint comprised 14% of sales volumes and 12% of proved reserves during 2018, with assets spread across Algeria, Ghana, Mozambique, Colombia, and Côte d’Ivoire. In the Forbes Global 2000 list for 2019, Anadarko ranked as the 587th-largest publicly traded company worldwide.
History
Founded in 1959 as a subsidiary of Panhandle Eastern Corporation, Anadarko originated following the discovery of extensive natural gas deposits within the Anadarko Basin, which covers regions of western Oklahoma, the Texas Panhandle, southwestern Kansas, and southeastern Colorado.
Anadarko transitioned to a publicly traded company in 1986 after being spun off from Panhandle Eastern Corporation.
The company acquired property in The Woodlands, Texas in 1999 to establish its corporate headquarters; this development culminated in 2014 with two office towers named after former CEOs.
Major acquisitions that expanded Anadarko’s asset base included Union Pacific Resources in 2000 for $4.4 billion; Berkeley Petroleum Corporation in 2001 for C$1.2 billion plus debt assumption; Western Gas Resources in 2006 for $5.3 billion; and Kerr-McGee also in 2006 for $16 billion—each significantly enhancing Anadarko’s market position.
Leadership changes saw Robert J. Allison Jr. step down as CEO in 2003, succeeded by James T. Hackett, previously COO at Devon Energy. In 2013, Al Walker took over as Chairman and CEO following Hackett’s retirement.
To optimize its portfolio strategically, Anadarko divested several assets: West Texas properties sold for $1 billion in 2007; Oklahoma and Texas holdings sold for $860 million that same year; Peregrino heavy oil interests offshore Brazil sold to Statoil for $1.4 billion in 2008; midstream assets transferred to Western Gas Partners for $483 million in 2012; and Marcellus Shale assets divested in 2016.
A pivotal discovery occurred in January 2012 when Anadarko identified the significant Collier gas field offshore Mozambique—marking an important entry into global LNG markets. By June 2019, Anadarko and its partners had progressed development on the Area 1 Mozambique LNG project targeting the Golfinho and Atum gas fields.
Facing financial pressures from low commodity prices, Anadarko reduced its workforce by approximately 17% in March 2016. Subsequently, it sold its Eagle Ford assets for $2.3 billion in January 2017.
In December 2016, Anadarko enhanced its deepwater production capabilities by acquiring Gulf of Mexico assets from Freeport-McMoRan.
The company was acquired by Occidental Petroleum in August 2019 following a competitive bidding process that surpassed an offer from Chevron Corporation. This acquisition represented a major consolidation within the energy sector and expanded Occidental’s global operational scope and market presence.
Environmental Performance
In December 2016, the Norwegian Institute of International Affairs placed Anadarko 14th out of 92 companies in the oil, gas, and mining sectors for their approach to indigenous rights and resource extraction activities in the Arctic region.
Involvement in the Deepwater Horizon Oil Spill
Anadarko owned a 25% non-operating interest in the Macondo Prospect, which was predominantly (65%) controlled and operated by BP. The 2010 Deepwater Horizon oil spill had financial repercussions for Anadarko. According to the joint operating agreement, Anadarko's liability for costs was proportional to its ownership share unless BP’s gross negligence or intentional misconduct was responsible for the disaster—a claim Anadarko maintained.
Agreement with BP
In early 2010, BP invoiced Anadarko for over $272 million covering its portion of cleanup and response expenses. By May 2011, MOEX Offshore, a Mitsui affiliate holding a 10% stake in Macondo, reached a $1.07 billion settlement with BP.
By October 2011, Anadarko resolved all outstanding claims with BP through a $4 billion settlement and transferred its 25% interest in Mississippi Canyon Block 252 (Macondo Prospect) back to BP. In exchange, BP provided Anadarko with indemnification against all liabilities related to the spill, including those under the Oil Pollution Act of 1990.
Clean Water Act Penalty
In December 2015, U.S. District Judge Carl Barbier imposed a $159.5 million civil penalty on Anadarko under the Clean Water Act, calculated at $50 per barrel spilled during the Deepwater Horizon event. Although Anadarko was not found directly responsible, its quarter ownership stake rendered it financially accountable. The penalty reflected a balance between Anadarko’s lack of direct fault and the incident’s severity. This ruling followed unsuccessful appeals by both BP and Anadarko to the Supreme Court of the United States disputing negligence determinations associated with the spill.
Tronox Litigation and Resolution
In April 2014, Anadarko reached a $5.15 billion settlement agreement with the U.S. Department of Justice and Environmental Protection Agency concerning nationwide cleanup obligations for contaminated waste sites—constituting the largest environmental contamination settlement ever recorded in U.S. history. These liabilities stemmed from Anadarko’s 2005 acquisition of Kerr-McGee, which had previously separated its subsidiary Tronox in 2006 to isolate extensive environmental damage accumulated over decades across 22 states. The pollution included Lake Mead contamination, radioactive waste on Navajo territories, and carcinogenic creosote at wood treatment facilities.
In 2009, shareholders of Tronox filed suit against Anadarko as Kerr-McGee’s successor entity, accusing it of deceiving investors about the substantial environmental liabilities inherited by Tronox. This lawsuit highlighted risks related to corporate restructuring strategies designed to segregate environmental responsibilities while preserving valuable oil and gas assets.
Legal Action by EPA and DOJ
The United States Department of Justice, representing the Environmental Protection Agency, initiated legal proceedings against Anadarko seeking $25 billion in damages. The parties ultimately settled in April 2014 for $5.15 billion—the largest environmental contamination settlement at that time within U.S. jurisdiction. Since then, combined cleanup expenditures linked to the BP Deepwater Horizon disaster have surpassed $60 billion.