Todd family exits Shell joint venture
Oil giant Shell has bought out its partner Todd Petroleum Mining from their long-standing 50-50 joint venture Shell Todd Oil Services, which operates the Maui, Pohokura and Kapuni gas fields.
As part of the deal, Shell is selling its 50% stake in the Kapuni field to Todd, which is privately owned by the Todd family.
The transaction ends a formal partnership dating back to 1955 when Shell, Todd and BP got together to explore for hydrocarbons in the Taranaki region. Kapuni, struck in 1959, was their first success and has been operating since 1969.
Shell NZ country chair Rob Jager said the financial terms were confidential.
The deal was the first concrete outcome of a major asset review announced in December 2015, he said.
“It’s a significant milestone for us,” he said.
“Shell will now explore options for the remaining assets with the assistance of JP Morgan.”
Owning 100% of Shell Todd Oil Services would simplify the review process, said Mr Jager, but he said there was no timeline for when it would be completed.
“It’s taken considerable time to get to the outcome we’re announcing today.”
As part of the transfer of Kapuni, Mr Jager said about 50 staff would transfer to a new company, Kapuni Services, which would ultimately be owned by Todd Energy.
In a statement, Todd Energy chief executive Dr Joanna Breare said the company was pleased to boost its stake in Kapuni.
“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.”
Shell describes Kapuni as “in its twilight” and said in 2016 it was looking for ways to extend its life.
Shell NZ sold its distribution and petrol station assets in 2010 to the company that today is Z Energy.
There was no update on Shell's intentions with respect to its other assets, including exploration acreage in relatively lightly explored prospects such as the Great South and New Caledonia basins.
Shell has been shrinking its global portfolio as the economics of the industry has changed to favour onshore and fracking operations rather than deep-sea exploration and production and to assist its $US50 billion purchase in 2016 of UK-based energy company BG.
(Additional reporting from BusinessDesk)