UPDATE: Shell announces 'review of interests in New Zealand'
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UPDATED 11 Dec: ‘Not an easy announcement’: Shell boss
Global oil and gas giant Royal Dutch Shell could exit its entire interests in New Zealand, depending on the outcome of a review announced this morning.
New Zealand country chairman Rob Jager told a press conference this morning the company had begun a review of its ongoing value to the Shell group globally.
The options “range from business as usual to a full country exit and anything in between,” he said.
Shell NZ produces about half of the country's natural gas, and employs about 430 people.
The company owns 84% of the Maui gas and condensate field and about half of the Kapuni and Pohokura fields. It is also a joint venture partner in the Maui gas pipeline, which transports gas from Taranaki northward to the Huntly power station.
In the year to December it reported revenue of $1.37 billion and net profit of $252.6 million.
The review is taking place in the context of Shell’s global strategy, said Mr Jager.
At an investor day on November 3, global chief executive Ben van Beurden said low oil prices were driving significant change in the industry.
“We are planning on a prolonged downturn and Shell is responding with urgency and determination,” he said.
Asset sales were part of its response to the challenge, he said. A $US20 billion asset sales programme for 2014 and 2015 was virtually complete and a further $US30b divestment programme was planned for 2016-18.
“The buyers are there, particularly in Downstream and some local gas markets and in non-traditional routes such as MLPs [master limited partnerships], private equity, and other oil & gas companies,” he said.
In 2010 Shell sold its downstream fuel retail business and a stake in NZ Refining to a consortium of Infratil and the Super Fund for $696.5 million.
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