New Zealand consortium buys Shell's downstream assets for $494m

29 March 2010 09:45  [Source: ICIS news]

SINGAPORE (ICIS news)--Energy and airport investor Infratil said on Monday that it has joined with the New Zealand Superannuation fund to buy oil major Shell’s downstream business in New Zealand, along with a stake in a refinery.

Shell would receive a cash payment of New Zealand dollars (NZ$) 696.5m ($494m) and a working capital adjustment of more than NZ$208m once the deal is settled on 1 April 2010, Infratil said in a statement, but did not give specific details of the downstream assets it would acquire.

The purchase remained conditional on funding and regulatory approval, Infratil added.

"The businesses being acquired have been built up by Shell over almost a century and their decision to sell due to changes in the global oil market has presented a 'once in a generation' opportunity," said Marko Bogoievski, CEO of Infratil.

The 50:50 joint venture between Infratil and the government pension fund will acquire a 17.1% stake in Shell’s 104,000 bbl/day refinery at Marsden Point, as well as 12 storage and terminal facilities around New Zealand, Shell said in a separate statement on Sunday.

Shell's chemicals, bitumen and marine assets were also included in the deal, it added.

“The decision to sell our New Zealand downstream business follows a comprehensive strategic review and fits with our drive to simplify our global downstream portfolio and concentrate on larger, integrated assets in growth markets,” said Shell’s donwnstream director Mark Williams.

Shell’s CEO Peter Voser had said in February that the company would cut back its global downstream operations in 2010 as part of a $1bn cost reduction scheme after the group reported major losses in its downstream businesses.

New Zealand-based Infratil is the country’s largest provider of public transport services, with energy operations in both New Zealand and Australia.

($1=NZ$1.41)

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