Planned buyout under scrutiny

WELLINGTON: The Commerce Commission is considering whether Mobil Oil’s plan to buy Z Energy’s jet fuel assets would substantially lessen downstream competition in the market.

The Wiri to Auckland pipeline and the Auckland Airport Joint User Hydrant are jointly owned and operated by BP, Mobil and Z.

However, Ampol’s recent takeover of Z triggered a change of ownership provision, giving Mobil and BP the right to buy Z’s stake.

Z previously said it had not struck a deal with Mobil.

Mobil’s share of the ownership interests will depend on whether BP also exercises its preemptive rights to buy out Z.

The Wiri to Auckland pipeline delivers jet fuel to the airport from the storage facility at Wiri, which is then stored at the airport.

In its application, Mobil said it intended to renegotiate the ownership agreements with BP to create an openaccess model, which would mean anyone wanting to supply jet fuel to Auckland International Airport could access the facilities.

However, the commission said it was unclear whether such a negotiation would be successful or whether BP intended to exercise its preemptive rights to buy out Z.

The commission is inviting feedback from the public on Mobil’s application by May 25. A decision is set to be delivered by June 20.