Shell has agreed to sell its stake in New Zealand’s first commercial onshore natural gas field as the company seeks to exit the country to streamline its global portfolio.
The oil giant has entered into a sale and purchase agreement (SPA) for the sale of its 50% interest in the Kapuni field with local joint venture partner Todd Energy.
Todd has been in the Kapuni joint venture since the venture’s formation in 1955.
The SPA is likely to take some months to finalize, and upon completion, operatorship of the Kapuni field will be transferred to Todd.
As part of the deal, about 50 employees working on Kapuni could have their employment transferred to Kapuni Services Ltd. which upon completion will be owned by Todd.
Meanwhile, the deal also sees Shell acquire the remaining 50% interest of the joint venture operating company, Shell Todd Oil Services (STOS), from Todd thereby owning 100% of the shareholding.
Shell said this will simplify its operational structure in preparation for any possible portfolio changes on the remaining assets.
“Shell will continue to explore divestment options for its remaining assets and interests in New Zealand. This is consistent with the Shell group’s approach to reshaping its global portfolio in line with its long-term strategy,” the firm said in a statement.
Last June, Shell-controlled Maui Development finalized the sale of its Maui natural gas pipeline to Australian asset management firm First State Investments, for NZ$335 million.
Maui Development, a joint venture company between Shell (83.75%), OMV NZ (10%) and Todd Energy (6.25%), has been operating the pipeline for over 35 years.
Transporting around 78% of all natural gas produced onshore and offshore New Zealand, it is the largest high-pressure transmission pipeline in the country and runs about 307km.
This comes after Shell announced in December 2015 that it will review assets in New Zealand to focus on large growth opportunities in deepwater and integrated gas projects.