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Shell could be set to sell its petrol retail network of 230 service
stations and its fuel distribution business in New Zealand.
Photo: Reflecting Shells long history in New Zealand, this is a Shell New Zealand map published in 1952.
In 2003, Shell Australia sold the rights to run its service stations
to Coles Myer supermarkets for A$100 million. Shell New Zealand said it
was a strategic review in New Zealand, under a directive from its
global head office, but was "not a fire sale". Rockpoint Corporate
Finance executive director Chris Stone said Shell's asset review was a
big strategic shift in the company's thinking.
While at an early stage, the fact the company would not say when they
had conducted such a review in the past made it a significant
development. "It's an intriguing view, because Shell has been in New
Zealand for over 100 years. To make the call to consider leaving is not
a trivial step."
A review, expected to take several months, will value all of the
company's downstream assets, including 230 service stations, the
largest share of petrol retailing outlets among the large oil
companies. Also being looked at are a 17 per cent shareholding in New
Zealand's Marsden Point oil refinery and a 36 per cent shareholding in
road building firm Fulton Hogan. Shell also has a 25 per cent stake in Loyalty New Zealand, which runs
Fly Buys, plus its aviation, bitumen, chemicals, commercial fuel
distribution and supply, and marine businesses.
The businesses under review are believed to collectively earn between
$100 million and $150 million a year. The highly profitable oil and gas
production operations, mostly in Taranaki, are not part of the review.
Shell spokeswoman Jackie Maitland said such reviews occurred
intermittently in Shell's operations around the world, but she would
not say when one had last been done in New Zealand. Stone said the assertion the Taranaki assets were not being reviewed
might just be a matter of timing, given the two parts of the company
were separate.
Maitland said the review would look at the long-term ownership options
for all of its downstream businesses, which could mean "divestment of
some, all or none" of them. Maitland said the New Zealand market
was different from Australia but the review would evaluate all
possibilities.
Gull New Zealand chief executive Dave Bodger said he would be
interested in the potential sale of any of Shell's sites and they were
always looking for expansion potential. He was unsure whether
Shell's stake in the refining company would be of strategic benefit to
Gull. "It's too early in the piece to comment on that." BP
spokesman Neil Green said it was an interesting move. BP was analysing
the announcement to ascertain what it meant for the industry and for BP.
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