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Shell sells New Zealand’s oldest gas field in Taranaki to long term partner

LEIGHTON KEITH: Last updated 16:18, April 6 2017

The head of Venture Taranaki sees the sale of New Zealand’s oldest natural gas field in the region as a positive development.

Shell New Zealand country chairman Rob Jager announced the sale of the onshore Kapuni field, which was discovered in 1959, to Todd Energy on Thursday which is part of the oil giants ongoing review of its operations, announced in December 2015.

The field, 85km south of New Plymouth, was uncovered by a joint venture between Shell, BP and Todd and went into full production in 1969.

VT chief executive Stuart Trundle saw the agreement as a good sign for Taranaki, where more than 7000 people were directly or indirectly employed in the energy sector.

“What is encouraging is after having invested here in the early 50’s, as Shell looks at their strategy for Todd they clearly are seeing an opportunity as part of their growth strategy,” Trundle said.

“The signals are clearly somebody feels there’s value and is prepared to invest in the long term future of the sector in Taranaki.

“It’s pleasing to see that those jobs are secured for their families.”

The sale and purchase agreement, which would transfer ownership to Todd on completion, is subject to conditions including regulatory approvals and is likely to take moths to complete, Jager said.

“We are pleased to be selling our interest in Kapuni to our long term joint venturer Todd Energy which, as an original participant in Kapuni, has demonstrated a huge commitment to the asset, the region and to New Zealand.”

The deal would see Shell take complete ownership of the field’s operating company STOS (Shell Todd Oil Services) which was formed in 1955.

Jager said the agreement would simplify the company’s structure for any future portfolio changes of its remaining assets.

However he wouldn’t be drawn on whether Shell’s move to simplify its asset structure was the first concrete sign the company would exit New Zealand.

He said Shell would continue to to explore divestment option for its remaining assets and interests in the country.

“It could range anywhere from a complete sale, to no sale and everything in between.”

He wouldn’t say how much money would change hands or in what direction as a result of the deal.

“The value is confidential between parties, so I will not comment on the sales value.”

Todd Energy chief executive Dr Joanna Breare said the company was pleased to take ownership of the field.

“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,” Breare said.

The 50 staff employed at Kapuni, including those that operate the production station, would be offered positions with Kapuni Services Ltd, which would be owned by Todd Energy.

“We look forward to bringing together their expertise with the knowledge Todd Energy has developed as a result of the successful expansion of the Mangahewa natural gas field,” Breare said.

Production at the Kapuni field was relatively low at the moment but there could be potential in the future.  

At the end of 2015 a seismic survey to assess the future of the field began and was the biggest of its kind to have been carried out in New Zealand and is believed to have cost tens of millions of dollars.

“Like all assets it’s as much about what the options are in the future as it is about what the production is today,” Jager said.

The transaction would not be the end of the relationship between Shell and Todd Energy, the companies both have stakes in other gas fields, including the Maui fieldand the billion dollar Pohokura project off the coast of North Taranaki which supplies about 40 per cent of the country’s natural gas demands annually.

Todd’s Taranaki investments:

Production sites:

  • McKee
  • Mangahewa
  • Kapuni
  • Pohokura
  • Maari
  • Maui

Exploration permits:

  • Nimitz – offshore North Taranaki, 50 per cent interest
  • Karewa – offshore Northern Taranaki, 100 per cent
  • Opunake – offshore central, 100 per cent
  • Te Kiri – onshore Western Taranaki 80 per cent 

 – Stuff


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