Anadarko looses after Algerian new tax on hydrocarbons income implemented
Ech-Chorouk, May 02, 2007
Anadarko Petroleum Corp said on Tuesday it expects $450 million in costs in 2007 related to tax on foreign petroleum companies income Algeria has imposed since a new law on Hydrocarbons was passed last year.
In its first-quarter earnings report, Houston-based Anadarko said it received information late last week that the windfall tax will be applied to the total value of Anadarko’s production rather than the portion generated by an international oil price above $30 a barrel.
« We find this action very disappointing, » Jim Hackett, Anadarko’s chief executive officer told analysts on a conference call. Hackett said he does not expect the issue to be resolved in 2007, but the company plans to « vigorously » assert its rights under its contract with Algerian state oil company Sonatrach.
Anadarko has 111 million barrels of proved undeveloped reserves in Algeria. For the first quarter, Anadarko booked a charge of $189 million related to the Algerian tax. The company had previously expected to reach a charge of $58 million in the first quarter.
Also on the call, the company said it expects to reap about $2 billion from divestitures in its pipeline and processing businesses in 2007.
FIRST-QUARTER
On Monday night, Anadarko said its first-quarter profit fell sharply because of lower oil and natural gas prices and an almost threefold increase in costs.
Net earnings were $104 million, or 23 cents per share, compared with $660 million, or $1.42 per share, in the same period a year earlier, the oil company said.
Anadarko’s revenues rose to $2.68 billion from $1.70 billion in the same quarter a year before, but costs rose steeply to $2.17 billion, driven higher by its oil and gas operations in particular, from $735 million in the first quarter last year.
The average daily price in the quarter per thousand cubic feet of natural gas fell to $6.24 from $7.48 and the average price per barrel of crude was $52.81, down from $57.60 last year, it said.
The company estimates second-quarter production of 46 million to 48 million barrels of oil equivalent and full-year production in the range of 184 million to 192 million BOE.
Reuters
