Shell can buy back Taranaki prospects

By Phil Boeyen, ShareChat Business News Editor

Tuesday 30th October 2001

Oil company Shell is being allowed to buy back the rights to a number of Taranaki energy fields which it was required to sell when it bought Fletcher Energy.

The Commerce Commission has cleared Shell Overseas Holdings to purchase the assets and interests associated with the formations below the existing Tariki, Ahuroa, Waihapa and Ngaere oil and gas production fields, collectively known as TAWN Deep.

A year ago, when Shell first received regulatory clearance to buy Fletcher Energy, permission was subject to Shell divesting the TAWN fields.

However Commission deputy chair, Paula Rebstock, says the Commission is satisfied that the proposed acquisition of TAWN Deep would not significantly lessen competition in the gas exploration and other gas markets.

The proposed acquisition only involves the gas exploration market and has no impact on the gas production market.

"The Commission considers that the presence of a large number of other exploration companies will ensure that Shell would not be able to exercise any market power," says Ms Rebstock.

"Furthermore, the Commission considers that the scope for the exercise of co-ordinated market power would not be enhanced by the acquisition."

In conclusion the Commission says that the barriers to entry are not likely to deter expansion or new entry in the exploration market.

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