Skip to main content

Update - OMV aquisition of Shell's New Zealand asset portfolio

By Neil Ritchie

It looks like full steam ahead for the New Zealand branch of Austrian giant OMV as the Commerce Commission has cleared the multinational conglomerate to acquire all of the remaining New Zealand assets of fellow global giant Royal Dutch Shell.

The acquisition will see OMV take ownership of Shell’s full New Zealand portfolio, including its stake in the Maui and Pohokura gas field joint ventures with Todd Energy and associated production, pipeline and tank assets.

The commission focused mainly on competition issues in the national market for production and the first point of sale for natural gas.

Deputy Chair Sue Begg has said the commission is satisfied the planned acquisition by OMV of Shell New Zealand’s assets will not substantially lessen competition in any of the markets it assessed.

At present OMV and Shell only compete to supply natural gas from the near-shore Pohokura gas-condensate field north of New Plymouth (as Todd Energy takes and sells its own share of Pohokura natural gas, condensate (light oil) and liquefied petroleum gas (LPG) separately). But all production from the offshore Taranaki Maui field, including LPG, is sold jointly.

“While OMV will be the largest producer and supplier of natural gas in the immediate future, its overall market share is likely to decline in the longer term as the Maui field is nearing the end of its life and Pohokura is easing off its peak.

“Todd Energy and Greymouth Petroleum have increased their shares of the market over the past five years, a trend that is likely to continue in the future. The constraint from these and other players, combined with the strong buying power of large gas users, means we are satisfied the acquisition (will) not substantially lessen competition,” Begg adds.

The commission has also concluded the acquisition will not affect competition in the supply of LPG or ‘foreclose access’ to onshore infrastructure assets (pipelines and tanks).

OMV’s international businesses include the exploration, production, marketing and sale of oil, condensate, LPG and natural gas. In New Zealand, it already has interests in the Maui and Pohokura gas fields, the offshore Taranaki Maari-Mania oil field, and limited onshore infrastructure assets (tanks and pipelines) associated with the transportation and storage of gas and liquids, as well as several offshore exploration permits.

OMV currently has a 26 percent partnership in Pohokura, and a 10 percent stake in Maui, while Shell holds 83.75 percent of Maui and 48 percent of Pohokura. And OMV has said it intends assuming the operatorship of both joint ventures once the proposed sale has been completed.

With the acquisition of all Shell New Zealand’s assets, OMV will also acquire 100% percent of the shares in each of Shell Exploration NZ (SENZ), Energy Infrastructure Limited (EIL), Shell Taranaki Limited (Shell Taranaki) and Shell New Zealand (2011) Limited.

Shell GSB Ltd (SENZ’s stake in and operatorship of Great South Basin exploration licence PEP 50119) is also being sold in a separate transaction, which includes a proposed drilling programme that could cost an estimated US$50 million.

Royal Dutch Shell is a multinational British-Dutch oil and gas company. In New Zealand, it has interests in the Maui and Pohokura gas fields, as well as a number of onshore infrastructure assets. Its primary activities involve the production and sale of oil, natural gas and LPG.

And as a result of the OMV acquisitions, Shell will exit the New Zealand market after earlier this year selling its 50 percent stake in the onshore Taranaki Kapuni gas-condensate field to Todd Energy for an undisclosed sum.