The exit of Shell from downstream activities “represents all integrated oil super majors across the world retreating from the forecourt”
The Infratil New Zealand Super Fund joint venture that bought Royal Dutch Shell’s local downstream assets gained an “extremely cheap” entry into the industry, according to brokerage McDouall Stuart.
The purchase at just under $700 million has been made at the bottom of the economic cycle, and both Infratil and the Super Fund are longer term participants willing to see through that cycle, said John Kidd, head of research at McDouall Stuart.
Shares of Infratil slipped 1.1 percent to $1.76, having reached an eight-month high on Monday.
The shares have climbed 12 percent this year, outpacing the NZX 50 Index’s 1 percent gain.
The company is rated a ‘buy’ based on the consensus of six recommendations compiled by Reuters.
The exit of Shell from downstream activities “represents all integrated oil super majors across the world retreating from the forecourt,” Kidd said.
New Zealand is a small, mature market, where the majors could present a good case for diverting “lazy capital,” and there are rumours that at least one other oil major is actively looking to exit its downstream businesses, he said.
“There are questions who can buy though, as they’re complex asset suites with investments along the supply chain.”
For example, the JV vehicle Aotea Energy’s purchase includes 95 truck stops, specialist aviation and marine supply facilities, 25 percent of Fly Buys, 12 storage and distribution facilities and a 25 percent share of the coastal shipping network that supports the national fuel distribution chain.
That’s in addition to 17.1 percent of New Zealand Refining and 229 retail forecourts.
“There’s not a large number of natural buyers for the complex suite, though perhaps more who would take part of the infrastructure or supply chain,” Kidd said.
It is well-known within the industry that oil products generate a minority of an oil company’s downstream earnings, and that Infratil has already indicated that a lack of retail investment has been notable over the past decade.
“What are they going to do over time to add further value to the retail side?” Kidd said.
“The joint venture is prepared to spend money to make it more appealing, and there’s a real opportunity there.”
As a NZ-owned entity, Aotea Energy, and with Shell possessing the largest market share in petroleum product sales, there may be an opportunity to provide a kiwi-oriented brand.
Though not suggesting Kiwifuel as a brand, the New Zealand market has seen an example in the growth and popularity of Kiwibank, Kidd said.
“This is a good NZ Inc story,” he said.
“Through commercial means, part of a multinational has been bought out and is back in the local fold with a cornerstone stake and the largest market share.”
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
MORE DETAILS:
A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
