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Anadarko Petroleum may sell its Algerian exploration and production business

Anadarko Petroleum Corp. (APC.N: Quote, Profile, Research) may sell its Algerian exploration and production business, which could fetch $7 billion to $9 billion, as it sheds assets to reduce debt after buying Kerr-McGee and Western Gas, according to sources familiar with the situation.

Anadarko, an independent oil and gas producer, has not made a final decision, the sources said.

Some factors that could influence its decision include agreeing on a price and the impact of a possible increase in Algerian taxes, the sources said.

The company, based in Houston, said that everything in its global portfolio is being considered for sale.

"We're looking at all of our assets, the value that they might bring on the market and how that might help us bring down the debt that we've taken on with these acquisitions," said Anadarko spokeswoman Susan Richardson.

The company wants to make sure it receives the best price possible for its assets and would sell accordingly, she said.

The sale would be above the $10 billion in asset sales it identified in August. It has since raised that figure to $12 billion. Andarko bought Kerr-McGee and Western Gas for more than $21 billion in August.

The company initially planned to raise money by selling up to $7.5 billion in equity, but last week said it would likely sell fewer shares as an Algerian sale would be used to reduce the amount of funds needed, sources said.

The asset sale, which has been discussed by the company's board, has become less pressing as the company has been approached for other assets and completed some deals ahead of schedule, one source familiar with the situation said.

But strategically, it would fit with the company's focus on operations closer to home and on natural gas, others said.

Any deal would have to take into account the potential for new tax laws in Algeria.

Algeria's parliament has endorsed a new energy law that has yet to be finalized, which would impose a tax of up to 50 percent on profits every time Brent crude averages over $30 a barrel. The law also may give state-owned oil and gas company Sonatrach, Anadarko's partner in Algeria, at least a 51 percent share in every oil and gas exploration contract awarded to foreign companies.

Specific details of the law are expected to be published sometime next year.

Anadarko has already announced asset sales and swaps in Canada and the Gulf of Mexico and has further sales planned, according to sources. These include the sale of some onshore North American assets and operations in China and Brazil.

Anadarko is the largest foreign operator in Algeria, where it signed a production sharing deal with Algerian state oil company Sonatrach in the 1980s and has discovered more than 2 billion barrels of oil, according to its web site.

Anadarko shares have fallen about 2 percent since June 22, the day before it announced plans to buy Kerr-McGee and Western Gas. The broader Standard and Poor's Oil, Gas and Consumable fuels index has risen 17 percent during that period.

After having hit a 52-week low of $39.51 on Oct. 4, Anadarko shares last traded at $47.31, up 1 percent, on the New York Stock Exchange compared with its year high of $56.98 on April 19. (Additional reporting by Michael Erman)


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