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Shell to sell remaining NZ assets to OMV for US$578 million

Shell to sell remaining NZ assets to OMV for US$578 million

By Sophie Boot

March 16 (BusinessDesk) - Royal Dutch Shell plans to sell its remaining New Zealand business to Austrian oil and gas giant OMV AG for US$578 million, as part of a US$30 billion international divestment programme.

The deal includes Māui, Pohokura and the Tank Farms, along with the Great South Basin venture, which includes a drilling commitment currently estimated to be US$50 million, Shell said in a statement. The deal is likely to be completed by the fourth quarter of the year pending regulatory approvals. Current employees will become part of OMV New Zealand when the deal is completed, Shell said.

Shell's integrated gas & new energies director Maarten Wetselaar said the deal was "another step towards reshaping and simplifying our company, deepening Shell’s financial resilience and competitiveness, in order to become a world-class investment."

The energy company has been shrinking its global portfolio as the economics of the industry has changed to favour onshore and fracking operations rather than deep-sea exploration and production, and to assist its US$50 billion purchase in 2016 of UK-based energy company BG.

Last April, the company took its first concrete steps to divest upstream New Zealand assets, selling the 60-year-old Kapuni onshore oil and gas field to its joint venture partner in the field, locally owned Todd Energy. At the time, it said it would also look to offload its other assets, including an 83.75 percent stake in Maui and a 48 percent stake in Pohokura. The company first announced a strategic review of Shell NZ's remaining assets in December 2015, having earlier sold its distribution and petrol station assets in 2010 to the company that today is Z Energy.

Rumours that OMV was interested in Shell's New Zealand assets were reported on last June, when Shell New Zealand confirmed JP Morgan was assisting in its engagement with interested parties, though OMV New Zealand declined to comment at the time. OMV AG already holds 10 percent of Maui and 26 percent of Pohokura.

(BusinessDesk)

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