Todd Energy to buy up country’s oldest gas field in Taranaki
The sale of New Zealand’s oldest natural gas field in Taranaki is a positive development says the head of the region’s economic development agency.
Shell New Zealand country chairman Rob Jager yesterday announced the sale of the onshore Kapuni field, which was discovered in 1959, to Todd Energy. It is part of the oil giant’s ongoing review of its operations, announced in December 2015.
The field, 85km south of New Plymouth, was uncovered by a joint venture between Shell, BP and Todd.
Venture Taranaki chief executive Stuart Trundle saw the agreement as a good sign for Taranaki, where more than 7000 people were directly or indirectly employed in the energy sector.
‘‘What is encouraging is after having invested here in the early 50’s, as Shell looks at their strategy for Todd they clearly are seeing an opportunity as part of their growth strategy,’’ Trundle said.
‘‘The signals are clearly somebody feels there’s value and is prepared to invest in the long-term future of the sector in Taranaki,’’ he added.
The sale and purchase agreement is subject to conditions including regulatory approvals and is likely to take months to complete, Jager said.
‘‘We are pleased to be selling our interest in Kapuni to our long term joint venturer Todd Energy which, as an original participant in Kapuni, has demonstrated a huge commitment to the asset, the region and to New Zealand.’’
The deal would see Shell take complete ownership of the field’s operating company STOS (Shell Todd Oil Services) which was formed in 1955.
Jager said the agreement would simplify the company’s structure for any future portfolio changes of its remaining assets.
However he wouldn’t be drawn on whether Shell’s move to simplify its asset structure was the first concrete sign the company would exit New Zealand.
He said Shell would continue to explore divestment options for its remaining assets and interests in the country.
Todd Energy chief executive Dr Joanna Breare said the company was pleased to take ownership of the field. ‘‘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,’’ Breare said.
The 50 staff employed at Kapuni, including those that operate the production station, would be offered positions with Kapuni Services Ltd, which would be owned by Todd Energy.
‘‘We look forward to bringing together their expertise with the knowledge Todd Energy has developed as a result of the successful
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Weather wrap - expansion of the Mangahewa natural gas field,’’ Breare said.
Production at the Kapuni field, which began in 1969, was relatively low but there could be potential in the future.
At the end of 2015 a seismic survey to assess the field’s future began and was the biggest of its kind to have been carried out in New Zealand and is believed to have cost tens of millions of dollars.
‘‘Like all assets it’s as much about what the options are in the future as it is about what the production is today,’’ Jager said.
The transaction would not end the relationship between the companies which both have stakes in other gas fields, including the Maui field and the billion dollar Pohokura project off the coast of North Taranaki which supplies about 40 per cent of the country’s natural gas demands annually.