Exclusive: Anadarko will continue negotiations with Occidental Petroleum – Sources

(Reuters) – Anadarko Petroleum Corp., the US oil and gas exploration and production company that has agreed this month to sell Chevron Corp. for $ 33 billion, decided Sunday that it will not be able to sell it. enter into negotiations to sell to Occidental Petroleum Corp. with the material.

The bidding war for Anadarko underscores the value of its assets in the lucrative Permian Basin in western Texas and New Mexico. The vast shale field contains oil and gas deposits that can produce reserves for decades thanks to inexpensive drilling techniques.

Anadarko's board of directors has ruled that the $ 38 billion Western purchase and purchase offer could lead to a deal higher than Chevron's, the sources said. Without such a formal decision, the contract between Anadarko and Chevron prevented him from forming relations with Occidental.

Anadarko will now begin negotiations with Occidental to see if he can reach an agreement, the sources said.

There is no certainty that Occidental, who was arguing with Anadarko before Chevron got his approval, would be able to sign his own deal, the sources said.

If this is the case, Chevron will have a chance to match the new deal. Should Chevron eventually lose to Occidental, Anadarko would have to pay Chevron $ 1 billion in severance pay, in accordance with the terms of their agreement.

The sources asked not to be identified because the case is confidential.

Anadarko and Occidental did not immediately respond to requests for comment. Chevron spokesman Kent Robertson declined to comment immediately.

The acquisition of Anadarko would add nearly a quarter of a million acres to Occidental's holdings in the Permian shale basin and double its global oil and gas production to 1.4 million barrels of oil equivalent per day.

Occidental unveiled its offer on Anadarko last Wednesday, offering to pay half in cash and half with its own shares. The agreement between Chevron and Anadarko was structured in 25% cash and 75% equity.

Chevron declined to say Friday in its call for results what would be its reaction if the Anadarko board decided that Occidental's proposal was the best of both. Pierre Breber, Chief Financial Officer of Chevron, however, said the company has the ability to put more money into his contract.

A major obstacle that Occidental must overcome in its negotiations with Anadarko is that the proposed agreement depends on the vote of West shareholders to approve it. An agreement with Chevron offers more certainty to Anadarko in this regard, as Chevron shareholders will not have a vote.

The shareholders of Anadarko will have a vote on the sale of the company, whether with Occidental or Chevron.