Anadarko Petroleum, one of the biggest US independent oil and gas companies, has decided to err on the side of caution – something it wishes the government would do when setting energy policy.
With natural gas prices far below last year’s highs and the economic downturn and banking crisis contributing to a credit squeeze, the Texas company just finished an offering of 30m shares of common stock to raise about $1.3bn operating funds.
Jim Hackett, chief executive, told the FT that if natural gas prices continued to soften, the company would have had to look for funding later in the year and, by then, the markets could have worsened. “We thought we’d take some execution risk off the table,” he says.
Anadarko has big projects ongoing in West Africa, Brazil, the deep water Gulf of Mexico and the Marcellus natural gas shale play in Pennsylvania.
A few years ago, he said, Anadarko would have said it was not so good to be in some international plays, but now he is starting to feel that way toward those in the US.
We find ourselves facing higher taxes and changes in legislation manipulated to penalise the domestic oil and gas exploration and production. All of these things make the US a less interesting place to invest.
If such legislation passes, Mr Hackett said it would make Anadarko pull back in the US. For it seems the government is not for allowing for a moderate, science-based path to more environmentally efficient and cleaner energy, instead favoring a political path. One only needs to look at ethanol, he says, to see that as a disastrous approach. “We’re scared to death of certain governments trying to manage the energy future,” he says.