14 Feb 2009

Shell considers selling NZ businesses

5:54 am on 14 February 2009

Shell is considering selling some of its businesses in New Zealand as it begins a strategic review of its assets in this country.

Shell New Zealand, owned by Royal Dutch Shell, has 225 petrol stations, holds a stake in a number of gas fields and has holdings in FlyBuys, Fulton Hogan and the New Zealand Refining Company.

New Zealand Refining announced the review to the stock exchange. It owns the country's only refinery at Marsden Point and is 17% owned by Shell.

It says Shell has indicated that the sale of some or all of its downstream businesses is under consideration, but no decision has yet been made.

Shell is one of four major oil companies that have a processing agreement with the refinery, which gives them access to refinery capacity in line with their market share.

The review is likely to take several months.

Shell spokesperson Jackie Maitland says the strategic review will not involve the company's exploration and gas operations, but will look at the long-term ownership options of the rest of its business.

New Zealand Refining Company chief executive Ken Rivers says Shell's review comes as no surprise.

Mr Rivers says he expects shareholders would review their portfolios regularly, and such reviews are more appropriate during troubling financial times.

He says it is hard to determine whether existing players in the oil market or a new entrant would want to purchase assets if they were made available for sale.

The Government is confident any potential sales will not result in a reduction in competition for consumers.

Energy and Resources Minister Gerry Brownlee, who met Shell representatives last week, says there is nothing in the review that causes him great concern.

He says there is no reason to assume any divestment would result in less competition or any adverse outcome for consumers and industry.