Shell sweetens Commerce application for FEG

By Phil Boeyen, ShareChat Business News Editor

Wednesday 15th November 2000

Energy giant Shell has amended its second application to the Commerce Commission in a bid to get approval to purchase Fletcher Challenge Energy.

In the amended application, Shell has offered to divest assets associated with two further energy fields - Kaimiro and Mangahewa - if it gets the acquisition go-ahead from the Commerce Commission.

The Commission is due to make public its decision on Shell's second application this Friday.

Shell's first application was turned down over concerns the company would have market dominance in the current gas production market, the post-2009 gas production market, and the LPG production market.

In its second application the company promised to divest all of Fletcher Energy's equity interest in a number of energy fields, including Tariki, Ahuroa, Waihapa, Ngaere, Ngatoro and McKee, and lower its equity interest in the Maui and Pohokura fields.

Originally the Commission had ten days to look at the proposal, but asked for an extension to Friday November 17th.

A Commission spokesman says agreeing to amend the Shell application does not make it any more likely than previously that a it will rule if favour of Shell's bid.

The amendment is not a result of any negotiation between the two parties, but no doubt Shell believes it is in its best interests to add a further 'sweetener' to the Commission to increase its chances of gaining a positive result.

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