By Ben Collins: Published: Apr 5, 2017 10:13 p.m. ET
WELLINGTON, New Zealand–Royal Dutch Shell PLC (RDSA) has taken a step toward an exit from its New Zealand assets with a deal to sell its 50% stake in a natural-gas field to its local venture partner, Todd Energy.
The agreement will also see Shell take full control of a joint venture company that operates two further gas ventures in New Zealand, simplifying Shell’s operating structure as it looks to offload the assets. Financial terms weren’t disclosed.
The sale of its stake in the Kapuni field in New Zealand’s Taranaki region to Todd Energy follows a review of operations in the country announced by Shell in December 2015 as part of its efforts to refocus its natural-gas and deep-water oil businesses following a slump in oil prices.
Shell has operated in New Zealand for about 100 years and its businesses account for around half of New Zealand’s natural-gas production and a large chunk of light oil output. Kapuni was discovered in 1959 and was New Zealand’s first commercial onshore natural-gas field.
Shell’s New Zealand chairman, Rob Jager, said Thursday there was no timeline for a sale of the remaining assets, which includes an almost 84% interest in the Maui field off the Taranaki coast and 48% stake in the Pohokura field that came on stream in 2006. It had “taken considerable time to come to this outcome we are announcing today,” Mr. Jager said
There had been considerable interest in the New Zealand assets in recent years, and all options for the remaining assets were being considered, Mr. Jager told The Wall Street Journal. J.P. Morgan has been hired to assist with the review.
With the deal for the Kapuni assets, Shell will sell full control of the field to Todd and will in turn buy Todd’s 50% stake in operating company Shell Todd Oil Services.
About 50 employees working on the Kapuni operation may be transferred to Kapuni Services Ltd., which Todd Energy will own when the deal is completed. The transaction remains subject to regulatory approvals and is expected to take several months to conclude, Shell said.
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