The long-awaited and widely anticipated sale, for an undisclosed sum, to Todd Energy contained few surprises. However, industry commentators say they will be surprised if Preussag Energie does not exercise its pre-emptive rights to gain part of the 3.667% Pohokura interest Shell intends selling to Todd.
Commentators also say the proposed sale, which needs the consent of Energy Minister Pete Hodgson, could well come under the scrutiny of the Commerce Commission. "They (the commission) should look at it, particularly since the question of market dominance is now one of whether acquistions lessen competition in the marketplace", said one commentator. The proposed deal would see Shell and Todd with rights to nearly all uncommited gas in New Zealand.
Although neither Shell nor Todd has divulged the sale price, it is believed to be around the $US120 million mark, considering McKee and Mangahewa contain about twice the recoverable reserves theTaraki, Ahuroa, Waihapa and Ngaere (Tawn) fields do. Swift Energy paid Shell about $US54.4 million for the lion's share of the Tawn fields late last year.
Shell New Zealand chairman Lloyd Taylor said: "Shell is pleased that we are able to sell the McKee and Mangahewa assets to a New Zealand company that has been, and continues to be, committed to the growth and development of New Zealand's energy resources,"
Todd acquiring an additional 3.667% share in the offshore Pohokura field would take its total stake to 18.667%.
Todd Energy managing director Richard Tweedie said acquiring McKee and Mangahewa, which had remaining reserves of 27 million barels of oil equivalen, would make Todd Energy the largest New Zealand-owned oil and gas company.
"This increases our reserve base (from 50 million to 77 million boe) and is a useful addition to our assets.
"We have explored for oil and gas in New Zealand for the last 46 years, participating in over 40 exploration wells. We intend continuing to play an important role in providing energy to support this country's growing gas and electricity requirements."
Todd Energy's downstream business distributes and retails gas and LPG, as well as generating and retailing electricity from a mix of hydro and thermal generation facilities.
Dr Taylor said further divestment announcements were expected in the near future. Previous sales were the Tawn licences to Houston-based Swift Energy and last week's sale of the Kaimiro field and half of Shell's holding in the Ngatoro mining permit, which contains the Ngatoro and Goldie oil fields, to Greymouth Petroleum.
The remaining divestments, to satisfy Commerce Commission concerns regarding Shell's 2001 takeover of Fletcher Challenge Energy, include part of the undeveloped offshore Kupe gas-condensate field, the other 29.78% half-stake in Ngatoro, and two small gas wholesaling companies _ Fletcher Challenge Gas Investments Ltd and Kapuni Gas Conracts Ltd.
Likely buyers are for Kupe, Genesis Power as it has already purchased 14.25% of Kupe from Shell, Natural Gas Corporation for FGCIL, Todd for KGCL, and any of Greymouth, New Zealand Oil and Gas or Indo-Pacific Energy for the other Ngatoro stake.
The other divestment is likely to take some time to complete, given the present redetermination procress of remaining recoverable Maui reserves, although Preussag remains the likely purchaser of that interest.
By Neil Ritchie in New Plymouth
