Royal Dutch Shell plc (Shell), reached an agreement today to sell its shares in Shell entities in New Zealand, to OMV for $578 million.
This follows a two-year strategic review of Shell’s interests in New Zealand and the sale of Shell’s interest in Kapuni in 2017. It is consistent with the Shell Group strategy of divesting $30 billion of assets by end 2018, and is in line with Shell’s drive to simplify the upstream portfolio and re-shape the company into a world class investment.
The agreement includes Maui, Pohokura and the Tank Farms. Shell has also entered into an agreement with OMV to sell its interest in (and operatorship of) the Great South basin venture, which includes a drilling commitment currently estimated to be $50 million.
The Sales and Purchase Agreement is subject to certain conditions which include normal regulatory approvals and is likely to be complete by fourth-quarter this year.
As part of the deal, the employees of Shell Taranaki Limited and Shell New Zealand will become part of OMV New Zealand, upon completion of the deal.
“Today’s announcement is another step towards reshaping and simplifying our company, deepening Shell’s financial resilience and competitiveness, in order to become a world-class investment,” said Maarten Wetselaar, Integrated Gas & New Energies Director. “We are proud of having worked in New Zealand for more than 100 years. Our customers, our neighbors, the regulator and partners have been a critical part of this journey and integral to our successes. I wish them all well.”
“I want to emphasize that the business will continue to be run as it is now, until the deal is complete” says Rob Jager, country chair of Shell Companies in New Zealand. “We have two high priorities over this transition period: to continue to run our assets in a safe and reliable manner and care for our people.