Anadarko Petroleum Corporation (APC) Gearing Up for the Big Leap

The mountain to be climbed

The LNG export plant will have a capacity of 50 million tons a year when fully functional. The huge capacity of the plant demands huge set-up costs. But for a debt-ridden company such as Anadarko Petroleum Corporation (NYSE:APC), to set up an export facility costing a whopping $15 billion is quite an uphill task. This is where Anadarko has decided to scale down its stake in the play and attract other oil and gas companies with big pockets to fund the investment.

Recently ONGC of India announced a deal to buy stake in the field, but later it was declared to be a premature declaration. Still, we cannot rule out such a deal; the price of the deal was approximately $2.5 billion.

Foolish bottom line

Although the announcement of a deal has been withdrawn, that doesn’t guarantee that no further deal will take place or even that the current deal won’t work out. A lot is in store for the oil and natural-gas companies operating from the East Coast of Africa, especially given the high demand for natural gas in Asian countries and the price premium available.

What’s more interesting is the fact that Statoil ASA(ADR) (NYSE:STO) is mulling the exploration of oil in the area and is confident about extracting 200 million barrels of oil from its offshore Cachalote well in Mozambique. Things are only becoming more interesting for Anadarko Petroleum Corporation (NYSE:APC) and Statoil in Mozambique, and above all for the global oil and natural-gas industry. Watch out for the stocks.

The article Anadarko Gearing Up for the Big Leap originally appeared on Fool.com.

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