Shell reshuffles assets ahead of likely sale
Shell is taking over its long-running joint venture with Todd Corporation to make it easier to sell its New Zealand assets.
Yesterday, Shell announced that Todd Energy would take over the Kapuni gas field in Taranaki.
Previously the field, discovered in 1959, was owned 50-50 by the two parties.
At the same time, Shell will take complete ownership of Shell Todd Oil Services (STOS), the oil field operating company which the two companies have owned together since 1955.
Shell New Zealand chairman Rob Jager said the transaction would make the process of selling its other assets more straightforward.
‘‘This 100 per cent ownership of STOS will simplify Shell’s operational structure in preparation for any possible portfolio changes to the remaining assets,’’ Jager said on a conference call with journalists.
The terms of the sale were confidential, Jager said.
In December 2015 Shell announced a review of its New Zealand assets, which could mean a complete sale of the business.
Jager said the asset swap was the first ‘‘concrete step’’ in the review of its assets, and marked a significant milestone for the company.
‘‘Shell now will continue to explore divestment options for the remaining assets and interests in New Zealand, with the assistance of [investment bank] JP Morgan.’’
In its 2015, Shell New Zealand reported a loss of $184.8 million as global oil prices plunged. Its revenues fell by more than $500m to $804.5m.
Todd Energy, owned by the Todd family, said in a statement that the transaction ‘‘strengthened its commitment to Taranaki natural gas production’’.
‘‘This transaction is consistent with Todd Energy’s focus on the development of New Zealand’s onshore natural gas resources and our commitment to the Taranaki region,’’ Todd Energy chief executive Dr Joanna Breare said.
About 50 Kapuni staff employed by both Shell and STOS will be offered positions with Todd, which will take over as operator of the aging gas field.
Jager said the transaction was not the end of Shell relationship with Todd Energy, with the two companies both holding stakes in other gas fields, including Maui.