Shell NZ assets sold to Austrian oil and gas explorer

Friday, 16 March 2018

Shell New Zealand has been sold to Vienna-based oil and gas company OMV, parent company Royal Dutch Shell announced today, Friday.

The sale marks the end of the multinational company's association in New Zealand after more than 100 years.

Maui A offshore platform in South Taranaki Bight

Royal Dutch Shell plc (Shell) said in a statement it had reached an agreement to sell its shares in Shell's eight entities in New Zealand to OMV for $794m ($US578m).

The share sale included enitites Shell Exploration NZ Ltd (SENZL), Taranaki Offshore Petroleum Company of NZ (TOPCO), Energy Petroleum Taranaki Ltd (EPTL), Energy Petroleum Holdings Ltd (EPHL), Shell Taranaki Ltd, Energy Infrastructure Ltd (EIL), SNZ (2011) Ltd and Energy Petroleum Investments Ltd (EPIL).

The Pohokura on shore natural gas production station near Motunui, North Taranaki.

* Shell sells New Zealand's oldest gas field in Taranaki to long-term partner

* Shell considers selling its NZ assets after more than a century

Shell GSB Ltd (SGSBL) is also being sold in a separate transaction.

The sale followed a two-year strategic review of Shell's interests in New Zealand and the sale of Shell's interest in Kapuni in 2017, the statement said.

The agreement included Māui, Pohokura and the Omata Tank Farms.

Shell also agreed to sell interest and operations in the Great South Basin venture, including an estimated $68.7m ($US50m) drilling programme.

OMV currently has a 26 per cent partnership in Pohokura and and 10 per cent in Maui.

The company said it intended to assume operatorship in both joint ventures.

OMV Senior Vice-President for Australasia Gabriel Selischi said both purchases would benefit New Zealand.

'The Pohokura and Maui gas fields are a critical part of New Zealand's energy supplies, and OMV is committed to

providing stability and continuity of gas supply,' he said.

The sale was consistent with the Shell Group strategy of divesting $42b ($US30b) of assets by the end of 2018, and in line with Shell's drive to simplify the upstream portfolio and re-shape the company into a world class investment.

The sales and purchase agreement was subject to certain conditions which include normal regulatory approvals and is likely to be complete by fourth quarter this year.

As part of the deal, all Shell Taranaki Limited and Shell New Zealand staff will become part of OMV New Zealand, upon completion of the deal.

'Today's announcement is another step towards reshaping and simplifying our company, deepening Shell's financial resilience and competitiveness, in order to become a world-class investment,' Shell integrated gas and new energies director Maarten Wetselaar said.

'We are proud of having worked in New Zealand for more than 100 years.

'Our customers, our neighbours, the regulator and partners have been a critical part of this journey and integral to our successes.

'I wish them all well.

Shell New Zealand country chairman Rob Jager said business would continue as normal until the deal was complete.

'We have two high priorities over this transition period - to continue to run our assets in a safe and reliable manner, and care for our people.'

Petroleum Exploration and Production Association of New Zealand (PEPANZ) chief executive Cameron Madgwick said the sale marked a vote of confidence in New Zealand.

Shell had been an important part of the community and sponsored a wide range of community programmes, he said.

Since 1999 OMV had supported conservation initiatives like whale surveys, native bird regeneration, supporting local Iwi and youth groups in Taranaki, and providing support to the Taranaki Air Ambulance Trust, Madgwick he said.

OMV envisage Maui production will be extended potentially up to 2020 before decommissioning commences.

Pohokura is expected to remain in production until 2036.