The company first announced a strategic review of Shell NZ's remaining assets in December 2015, having earlier sold its distribution and petrol station assets in 2010 to the company that today is Z Energy.
Shell's exit from New Zealand follows that of Houston oil giant Anadarko, which left the country late last year, and the withdrawal earlier of Brazilian giant Petrobras, Norwegian explorer and producer Statoil and Mobil.
While the Labour-led Government is proposing changes to the Crown Minerals Act to rein in fossil fuel exploration, operators such as OMV and New Zealand Oil & Gas have historical permits under the old regime, which the Government is not contesting.
Low global oil prices and the high risk and costs associated with deepwater exploration have been cited by most of the departing oil companies.
New Zealand Oil & Gas recently gained an extension to its exploration permit off the coast from Oamaru, to decide by April next year whether to test drill or drop the permit for the Clipper prospect.
The Shell deal with OMV includes fields Maui, Pohokura and the Tank Farms, along with the Great South Basin venture, which includes a drilling commitment currently estimated to be $US50million, Shell said yesterday.
OMV AG already holds 10% of Maui and 26% of Pohokura.
The deal is likely to be completed by the fourth quarter of the year, pending regulatory approvals.
Shell's integrated gas new energies director Maarten Wetselaar says the deal is ``another step towards reshaping and simplifying our company, deepening Shell's financial resilience and competitiveness, in order to become a world-class investment''.
The energy company has been shrinking its global portfolio as the economics of the industry have changed to favour onshore and fracking operations rather than deep-sea exploration and production, and to assist its $50billion purchase in 2016 of UK-based energy company BG.
Last April, the company sold the 60-year-old Kapuni onshore oil and gas field to its joint venture partner in the field, locally owned Todd Energy.
Rumours that OMV was interested in Shell's New Zealand assets were reported last June, when Shell New Zealand confirmed JP Morgan was assisting in its engagement with interested parties. OMV New Zealand declined to comment at the time.
- Scoop
