OMV to acquire Shell’s gas and liquids portfolio

Issued 10 August 2018
Release No. 20

Clearance granted for OMV to acquire Shell’s gas and liquids portfolio

The Commerce Commission has granted clearance to OMV to acquire Royal Dutch Shell’s gas and liquids portfolio in New Zealand.

The acquisition will see OMV take ownership of Shell’s full New Zealand portfolio, including its stake in the Maui and Pohokura gas field joint ventures with Todd Energy and the associated production, pipeline and tank assets.

In considering the acquisition, the Commission focused mainly on competition issues in the national market for production and first point of sale of natural gas.

Deputy Chair Sue Begg said the Commission was satisfied the acquisition would not substantially lessen competition in any of the markets it assessed.

“OMV and Shell only compete to supply natural gas from the Pohokura gas field, as all production from the Maui field, including LPG, is jointly sold,” Ms Begg said.

“While OMV will be the largest producer and supplier of natural gas in the immediate future, its overall market share is likely to decline in the longer term as the Maui field is nearing the end of its life and Pohokura is easing off its peak. Todd Energy and Greymouth Petroleum have increased their shares of the market over the past five years, a trend that is likely to continue in the future. The constraint from these and other players, combined with the strong buyer power of large gas users, means we are satisfied the acquisition would not substantially lessen competition.”

The Commission has also concluded the acquisition would not affect competition in the supply of LPG or foreclose access to onshore infrastructure assets (pipelines and tanks).

A copy of the Commission’s full reasons for granting clearance will be available on the case register in due course.

Background

OMV
OMV New Zealand is a wholly owned subsidiary of Austrian company OMV Aktiengesellschaft. OMV’s business includes the exploration, production, marketing and sale of oil and natural gas. In New Zealand, OMV has interests in the Maui and Pohokura gas fields, the Maari oil field, limited onshore infrastructure assets (eg, tanks and pipelines) associated with the transportation and storage of gas and liquids, and offshore exploration permits.
With the acquisition OMV will acquire 100% of the shares in each of Shell Exploration NZ Limited SENZL), Energy Infrastructure Limited (EIL), Shell Taranaki Limited (Shell Taranaki) and Shell New Zealand (2011) Limited.

Shell
Royal Dutch Shell is a multi-national British-Dutch oil and gas company. In New Zealand, Shell has interests in the Maui and Pohokura gas fields, as well as a number of onshore infrastructure assets. The primary activities of Shell in New Zealand involve the production and sale of oil, natural gas and LPG. As a result of the acquisition, Shell will exit the New Zealand market.

Merger clearance process
When considering a proposed merger, the Commission must determine whether any competition that would be lost with the merger would be substantial. For more information see our website.

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