Texas-based energy explorer and producer Anadarko plans to leave New Zealand, with persistently low oil prices making marginal investments in distant areas less appealing.
The company's local branch has already scaled back its exposure to New Zealand and has told its partners in the exploration permit in the Canterbury Basin it wants to resign as the operator, country head Alan Seay told BusinessDesk.
Its partners, Lattice Energy Resources and Discover Exploration, have indicated they want to continue on and have lodged a change of conditions application with New Zealand Petroleum & Minerals, although a change of operator and the transfer of an interest in a permit needs approval by Energy Minister Megan Woods.
"In this continued low oil price environment we have to make very tough decisions about where we invest capital and frontier areas like New Zealand will always find it hard to compete," Seay said. "Sadly we've made the call we won't be continuing with the New Zealand programme."
Anadarko set up shop in New Zealand in 2010 when international oil prices were bouncing back from a slump in the wake of the global financial crisis. However, the emergence of shale gas saw global prices plunge in 2015 from which benchmark oil prices have struggled to recover, detracting from the allure of more remote prospects such as in New Zealand.
Last week, the global group announced details of its 2018 capital programme, most of which is earmarked for operations in North America, while its international focus is on Algeria and Ghana. Exploration investment will focus on the Gulf of Mexico.
Anadarko New Zealand has accumulated losses of US$203 million from incorporation in February 2010 through to Dec. 31, 2016. In calendar 2016, it booked a US$14.3 million impairment charge on its non-producing leasehold assets, effectively writing off the value of its exploration assets in the period.