Royal Dutch Shell plc (Shell) announced it has signed a sale and purchase agreement to sell its downstream business in New Zealand to a consortium of Infratil and the Guardians of New Zealand Superannuation.
The deal includes all of Shell’s downstream assets in New Zealand (see notes to editors) but does not include the company’s upstream activities in the country. As part of the agreement, Shell will sell its 17.1% shareholding in the 104,000-barrel per day refinery at Marsden Point and also its network of more than 220 retail stations.
The business will be sold to the consortium as a going concern and Shell will receive a cash payment of NZ$696.5 million together with a working capital adjustment. In addition, the companies have signed an agreement for Shell to continue to provide crude oil and refined products. The parties have also entered into a trademark licensing agreement which entitles the consortium to operate retail service stations under the Shell brand.
Commenting on the announcement, Shell Downstream Director, Mark Williams said: “The decision to sell our New Zealand downstream business follows a comprehensive strategic review and fits with our drive to simplify our global downstream portfolio and concentrate on larger, integrated assets in growth markets.”
Adding his comments, Rob Jager, Country Chair, Shell New Zealand, said: “Having built up a strong and high quality business providing outstanding products and service to New Zealanders for close to 100 years, we are very pleased to have concluded our review with a sale to a buyer with strong New Zealand connections.
“With staff transferring to the new company and Shell continuing to supply products and the retail brand, there will be a high level of continuity for customers following the change in ownership. We are now focused on ensuring that we manage the smooth transition of the business,” said Mr Jager.
Notes to editors
Shell New Zealand
The sale includes Shell’s retail, commercial fuels, bitumen, aviation, marine, chemicals, supply and distribution businesses in New Zealand, and Shell’s shareholdings in Loyalty New Zealand (25%) and New Zealand Refining Company (17%).
Following the divestment of its downstream assets, Shell remains an industry leader in New Zealand’s oil and gas exploration and production sector through its investments in Taranaki. It is the majority owner (83.75%) of the Maui gas and condensate field that has provided New Zealand with a sustained supply of natural gas since 1979. Shell also owns 50% of Kapuni, New Zealand’s oldest gas and condensate field, and is the largest joint venture partner (48%) and operator of the Pohokura field, which began production in 2006 and today meets around 40% of the country’s natural gas requirements. Shell is also the 50% owner of Shell Todd Oil Services, the operator of the Maui and Kapuni fields.
Infratil is a company listed on the New Zealand Stock Exchange, it is one of the ten companies in the NZX Top Ten. It was established in 1994 and owns businesses in the energy, airport and public transport sectors. Its energy operations are in New Zealand and Australia, it owns 66% of Wellington Airport and 100% two airports in the UK and is New Zealand’s largest provider of public transport services through its commuter bus operations in Auckland and Wellington. Infratil is majority New Zealand owned by its over 25,000 New Zealand share and bond holders.
Guardians of New Zealand Superannuation
The Guardians of New Zealand Superannuation and the New Zealand Superannuation Fund were established by the Government in 2003. The purpose of the Fund is to reduce the tax burden for future New Zealanders of the cost of New Zealand Superannuation. The Guardians manage and administer the Fund, which as at 31 January 2010 was just under $16 billion.
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