Infratil to build a large NZ business from Shell assets

Infratil sees the Shell Oil assets it is negotiating to buy as an opportunity to create a substantial New Zealand business at a time of growing consumer preference for local companies. A consortium including Infratil and New Zealand Super Fund has been negotiating to buy Shell's retailing and other downstream assets. Infratil said the talks were subject to a number of conditions, some of which were material and outstanding. If these were satisfied the deal was expected to be completed on April 1.

Infratil sees the Shell Oil assets it is negotiating to buy as an opportunity to create a substantial New Zealand business at a time of growing consumer preference for local companies.

A consortium including Infratil and New Zealand Super Fund has been negotiating to buy Shell's retailing and other downstream assets. Infratil said the talks were subject to a number of conditions, some of which were material and outstanding.

If these were satisfied the deal was expected to be completed on April 1.

Infratil said in an investor briefing today that the business should respond well to selective investment after many years of having limited capital available.

If the deal goes ahead, a local chief executive and integrated management team would replace a structure of multiple reporting lines to an offshore parent.

Decisions would be based on a local context and integrated business model in future.

The briefing raised the possibility of bringing roles, such as an offshore customer service centre, back to New Zealand. It also said "on-shoring" of research and development would create solutions tailored to the New Zealand market.

There could be innovative new offers for business customers "unconstrained by Shell global policy."

The deal presented a significant business improvement opportunity in a rapidly changing industry.

The briefing notes said Mobil also wanted to exit infrastructure and customer facing activity while Infratil believed BP and Caltex had limited willingness to step up their investment in New Zealand.

Infratil interpreted these signals as the beginning of a restructuring of the industry here.

About 70% of Shell's local product was sourced from the New Zealand Refining Company, operator of the Marsden Point oil refinery. The Shell deal includes a 17.1% share of the refinery.

The briefing envisages the continuation of the Shell brand in the medium term but a de-imaging of commercial assets and corporate communications.

Shell is not selling any of its oil and gas production and exploration assets in New Zealand.