Houston-based Anadarko Petroleum Corp. (NYSE: APC) reports that a mechanical issue involving the production riser system at the Caesar/Tonga project in the deepwater Gulf of Mexico will delay first production, which was expected in mid-2011.

Although the production riser system underwent an extensive qualification program prior to installation, Anadarko's recent hydro-testing of the riser provided results that preclude it from being put into service on this project.

Caesar/Tonga is located in the Green Canyon area of the Gulf of Mexico, in close proximity to Anadarko's Constitution spar in Green Canyon block 680.

"We are delaying first production at the Caesar/Tonga project after our recent hydro-test of the production riser system indicated it was not fit for service," says Chuck Meloy, Anadarko senior vice president, worldwide operations. "The project was otherwise on schedule, as we had recently secured the necessary permits to begin completions on the first two wells; nonetheless, in the interest of safety and the environment, delaying startup is clearly the right decision."

Meloy reaffirmed that the company still expects full-year 2011 sales volumes will be well within the range of 240- to 250 million barrels of oil equivalent.

Anadarko operates the Caesar/Tonga development with a 33.75% working interest. Co-owners in the project include Statoil Gulf of Mexico LLC (23.55%), Shell Offshore Inc. (22.45%) and Chevron U.S.A. Inc. (20.25%).

As of year-end 2009, Anadarko had approximately 2.3 billion barrels equivalent of proved reserves, making it one of the world's largest independent E&Ps.