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Shell stand-off over New Zealand oil asset

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BRIDGET CARTER: Mergers & Acquisitions Editor, Sydney: @BridgetCarterNovember 14, 2016

Shell appears to be in a stand-off with Todd Energy over the future of its $1 billion-plus portfolio of oil exploration and production assets in New Zealand, according to sources.

Investment bank JPMorgan is understood to be working for the energy company, although no formal process has yet been launched, according to sources, despite suggestions that documents would start being sent out around August.

It is understood that the hold-up is in connection to ongoing discussions with its local partner Todd Energy, which is preventing the assets being sold on the open market.

Shell is divesting the assets as part of a $US30bn ($39bn) global sell-down by the oil and gas company, following its $US50bn takeover of BG Group and signalling a retreat from various markets.

The family-owned Todd Energy is seen as the most logical buyer.

The oil company’s assets are located in the Taranaki region on the west coast of the North Island, including 83.75 per cent of the Maui gasfield, half of Kapuni, which is New Zealand’s oldest gasfield, and 48 per cent of the Pohokura field, which began production in 2006 and now supplies about 40 per cent of the country’s natural gas requirements.

It also owns 50 per cent of Shell Todd Oil Services.

The move by Shell to distance itself from the New Zealand market comes as the global oil major is expected to sell down its remaining 13.3 per cent stake in Australia’s $24bn Woodside Petroleum after it sold its New Zealand petrol stations to Z Energy about six years ago.

However, the latest market volatility linked to the election of Donald Trump as US President could deter the company from embarking on a market sell-down of its Woodside stake for some time.

SOURCE

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