30 September 2004-05 / 038
Commerce Commission may revoke Pohokura
gas authorisation
The Commerce Commission is considering revoking its decision to authorise four companies to enter into arrangements to
jointly market and sell gas produced from the Pohokura natural gas field on the basis that a material change in
circumstances may have occurred since the authorisation was granted.
The Commission granted authorisation to OMV New Zealand Limited, Shell Exploration New Zealand Limited and Shell
(Petroleum Mining) Company Limited and Todd (Petroleum Mining Company) Limited in September 2003. Subject to conditions,
the Commission’s authorisation provided for the parties to discuss and agree on all relevant terms and conditions,
including price, quantity, rate, specification and liability for the joint sale of gas from the Pohokura natural gas
field. The authorisation also provided for the parties to negotiate and enter into contracts for the sale of gas from
the field jointly, for example as one seller.
Commission Chair Paula Rebstock said Shell and OMV informed the Commission in April this year that the parties had
decided to market gas from the Pohokura field separately.
“On the face of it, this represents a material change in the circumstances around which the Commission determined to
authorise the proposed anti-competitive arrangement, and on this basis, the Commission is considering a possible
revocation of its decision,” said Ms Rebstock.
“As part of the process, the Commission is inviting interested parties to make submissions on whether revocation is
appropriate” said Ms Rebstock.
While the Commission generally prefers separate marketing because competition is enhanced by more competitors in the
market, Ms Rebstock said the joint marketing arrangement had been authorised primarily because it was considered that it
would bring about earlier production from the field. As that appears to be no longer the case, the Commission considers
that there may be a case for revocation of the authorisation.
ENDS