Shell may sell 17% stake in NZ Refining, reviews NZ assets

Thursday 12th February 2009

Royal Dutch Shell Plc, Europe's largest oil company, is reviewing its investments in New Zealand including a 17% stake in the nation's only refinery.

Shell is New Zealand Refining Co.'s third-biggest shareholder after BP and Mobil and one of four oil companies that have a processing agreement with the refinery.

"Shell has commenced a strategic review to study the long-term ownership options of its downstream businesses in New Zealand," New Zealand Refining said in a statement today. "Divestment of some or all of the downstream businesses are options under consideration, but no decisions have been made."

The oil company based in the Hague last month posted its first quarterly loss on 10 years - US$2.8 billion - as the price of oil tumbled and said the outlook is "challenging."

Capital investment for Shell last year was a lower-than-expected US$32 billion, as it disposed of more assets than it had earlier planned, according to Bloomberg.

In New Zealand, Shell's assets under review may include 230 petrol stations, a one-third stake in construction firm Fulton Hogan and a quarter-share of the Flybuys scheme.

Shares of New Zealand Refining trade on relatively low volumes because the four biggest oil company shareholders collectively own 73% and U.S. oil company Chevron owns a further 13%.

The stock fell 0.4% to NZ$7.27 today and has soared 26% in the past month.

Businesswire.co.nz

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