Shell Selling New Zealand Assets to OMV for $578 Million

   By Robb M. Stewart

Royal Dutch Shell PLC (RDSB) has moved to withdraw from New Zealand with a deal to sell its interests in a portfolio of energy assets to OMV AG (OMV.VI) for US$578 million.

The sale follows a two-year review of Shell's operations in the country and 2017 sale of its 50% stake in the Kapuni natural-gas field to local venture partner Todd Energy. Shell has pledged to sell US$30 billion worth of assets by the end of 2018 as it seeks to simplify its portfolio and refocus on natural-gas and deep-water oil businesses.

The agreement with Vienna-based oil-and-gas producer OMV covers Shell's interests in eight New Zealand businesses, and also includes a deal to sell Shell's stake in the Great South Basin venture and a roughly US$50 million drilling commitment.

"Today's announcement is another step towards reshaping and simplifying our company, deepening Shell's financial resilience and competitiveness," Maarten Wetselaar, Shell's director for integrated gas and new energies, said.

Shell has operated in New Zealand for about 100 years, and its businesses account for about half of the country's natural-gas production and a large chunk of light oil output. The assets include an 84% interest in the Maui gas field off the Taranaki coast that was discovered in 1969, a 48% stake in the Pohokuru field that came on stream in 2006 and a 61% stake in the Great South Basin permit off the coast of Otago and Southland. It also owns the Tank Farm, which is made up of a number of sites where Shell operates tanks holding condensate and naphtha.

The deal with OMV remains subject to regulatory approval and is expected to complete by the end of the year, Shell said. Until then, it said it would continue to run the business as it currently is.

Employees of the companies two arms in the country, Shell Taranaki Ltd. and Shell New Zealand, will become part of OMV.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

March 15, 2018 17:55 ET (21:55 GMT)

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