Last week was quite eventful for ConocoPhillips (NYSE:COP) and Anadarko Corp (NYSE:APC). ConocoPhillips reportedly received a bid from an Indian consortium for its oil sands assets in Canada, won a victory in an arbitration case against Venezuela’s PdVSA, and was reported as being a part of the Alaskan government’s plans to export LNG to Asian markets. Anadarko, on the other hand, received approval for a deal to sell its 30% stake in a Brazilian offshore block to Petrobras.
Petrobras, the state oil company of Brazil, received approval to acquire Anadarko Corp‘s (NYSE:APC) 30% stake in the ES-M-661 offshore block located in the Espirito Santo basin. The approval was given by Brazil’s National Petroleum Agency, or ANP, at a board meeting last week. The information regarding the same was provided in a statement on ANP’s website today. Anadarko said that it had relinquished its interest in the block approximately six months ago. ((Petrobras Gets Approval to Acquire Anadarko Stake in Brazil, Bloomberg Businessweek))
Petrobras operates the offshore exploration area with a 40% stake. Closely held firm IBV, an equal joint venture of Bharat Petroleum and Videocon Industries, holds the remaining 30%. Anadarko, however, retained its interest in the ES-M-588 and ES-M-663 blocks that are a part of the broader BM-ES-24 concession. 
Anadarko had, in January this year, put up its Brazilian business for sale in order to pay off debts and focus on its assets in the Campos basin. It had been expecting a $3-4 billion valuation for these and received interest from various international oil exploration companies. However, owing to the Brazilian rules requiring local sourcing of components in new offshore drilling rigs and production facilities, as well as increasing political interference, previously interested companies held back.
Anadarko initially claimed that found Petrobras’ offering price too low to make a sale and hence put the sale on hold. Hence, the information that the Petrobras deal happened six months back comes as a surprise to us, and in the absence of a disclosure regarding the terms of the deal, we believe that Petrobras used its advantage as a state-owned firm to negotiate a favorable deal for itself. See more in our note: Petrobras Wins Approval To Acquire Anadarko’s Stake In Offshore Block
We recently revised our price estimate for Anadarko to $88, which is about 25% ahead of its current market price.
ConocoPhillips (NYSE:COP) has received a $5 billion bid for a substantial portion of its producing, developing, and emerging oil sands assets in Alberta. This bid was placed by a consortium of Indian companies: Oil & Natural Gas Corporation (ONGC), Indian Oil Corporation, and Oil India Limited, back in July. This information, however, was made public only now by unnamed executives at these firms. Although the story was later officially denied by ONGC later, we believe that it is true because it was corroborated by an executive from Oil India. 
Conoco had appointed investment banking firm Scotia Waterous as the exclusive financial adviser to assist in its search for a buyer for up to 50% stake in these assets. The offering comprises of ConocoPhillips’ Surmont, Thornbur, Clyden, Saleski, Crow Lake, and McMillan Lake assets, most of which are undeveloped. ((Deal Journal India: India Bids for ConocoPhillips Assets in Canada, WSJ)) You can read our full analysis here.
ConocoPhillips, along with Exxon Mobil (NYSE:XOM) and BP (NYSE:BP), stands to gain from the Alaskan government’s decision to export liquefied natural gas (LNG) to Asian markets. Alaska wants a $50 billion pipeline and export complex to be built to develop natural gas that is stranded on its icy North Slope. These companies have been given time till the end of this month to come up with a plan to pipe the gas southward to an Alaskan port and condense it into LNG, for export. 
We have researched this move and provided a detailed analysis here. Alaska’s Plans To Export LNG To Asian Markets Is Huge For Oil And Gas Majors
ConocoPhillips was awarded $66.8 million as compensation in a dispute against Venezuela’s state-controlled oil company, Petroleos de Venezuela SA (PdVSA). The dispute was over oil production cuts implemented under Organization of Petroleum Exporting Countries (OPEC) production quota policy in 2006-2007. The ruling was given by the International Chambers of Commerce (ICC), a Paris-based international arbitration panel that found that these production cuts implemented by PdVSA breached agreements that it had signed with ConocoPhillips.  The battle may have been won, but the war is not yet over. To know why, you can read our article published earlier this week.
We recently revised the Trefis price estimate for ConocoPhillips to $60 which is about 5% ahead of its current market price.Notes:
- BPCL, Videocon find oil off Brazil Coast, Business Standard [↩]
- Indian Consortium Bids for ConocoPhillips Assets in Canada, RigZone [↩]
- Alaska Sees Asia Driving Annual $20 Billion Via Pipeline, Bloomberg [↩]
- CORRECT: ConocoPhillips Awarded $66.8 Million Against Venezuela, MorningStar [↩]