Origin sells out of NZ oil and gas interests

Australian energy giant Origin Energy is selling out of its New Zealand interests in the Kupe gas project and the Canterbury basin.

The Australian energy retailer said yesterday it would sell its conventional oil and gas business to focus on energy markets and the LNG business.

Its Australian and New Zealand upstream business would be sold by an initial public offering (IPO) and listed on the Australian stock exchange next year.

The spin-off company would hold various interests located offshore New Zealand, including a 50 per cent stake in the Kupe gas project and Canterbury basin exploration.

Origin chairman Gordon Cairns said the sale was part of its strategy to reduce debt and improve shareholder returns.

The new company’s assets would be better supported by being an independent business, he said, given Origin’s limited ability to invest in them at the moment.

Origin would help with the transition but otherwise would not hold any shareholding in the new company.

‘‘[The new company] will have diversified exposure to the Australian east coast, west coast and New Zealand gas markets,’’ Origin said.

‘‘It will have a mix of production and exploration assets. Both of these provide a foundation for further growth and development.’’

Origin sold out of its cornerstone shareholding in Contact Energy in New Zealand last August.

Last month, NZX-listed Genesis Energy said it would buy NZ Oil & Gas’ stake in Kupe for $171 million, which would lift its stake in the project from 15 per cent to 46 per cent.