Shell Kicks Off Exit Strategy in New Zealand
In the latest instance of Royal Dutch Shell reshaping its overall look, the company’s New Zealand operations announced earlier this month that it was selling a portion of its assets there to a business partner, Todd Energy. That firm will now be in charge of the Taranaki-based Kapuni gas field, which the two companies had equally run for nearly 60 years.
Part of that deal puts Royal Dutch Shell in complete control of Shell Todd Oil Services, which will make it easier for an eventual sale of all New Zealand assets held by the company. The partnership between the two companies in this instance had been in place since 1955, though a connection still remains with respect to the field in Maui, New Zealand, which remains one of the partnership’s most lucrative ventures.
Shell has been disposing of assets for the past few years to accommodate its acquisition of natural gas giant BG Group. Shell New Zealand has fallen victim to the plunging losses many companies have endured over the past few years due to the steep drop in oil prices. In this instance, the 2015 financial numbers show that the company’s revenues dropped from roughly $1.3 billion from the year when prices began to dip to just over $800 million.
In addition to maintaining part-ownership of the Maui field, the company also has a strong financial interest in the Pohokura field. Prior to this breakup, those fields helped supply natural gas to approximately 70 percent of the country.
The likely departure from New Zealand would end more than a century of exploration within the country for Royal Duch Shell. The company made known its intentions at the end of 2015 when it announced that a full review of its assets within the country were taking place.