Commerce Commission reconsidering Pohokura joint venture

Competition watchdog the Commerce Commission is considering withdrawing its authorisation of the joint venture carving up revenues from the key Pohokura gas field in Taranaki.

In September last year the commission authorised joint venture partners - Shell New Zealand, OMV and Todd Petroleum Mining - to jointly sell gas from the field rather than sell it in competition with each other.

However, commission chairwoman Paul Rebstock today said the decision announced in by April by Shell and OMV to market Pohokura gas separately represented a "material change" in the arrangement it had approved.

She said in a statement that "on this basis, the commission is considering a possible revocation of its decision".

Pohokura, located mostly off the coast of Taranaki, is estimated to have around 750 petajoules of gas, roughly half of New Zealand's remaining known developed and undeveloped gas reserves.

The field is 48 per cent-owned by Shell,with OMV and Todd both owning 26 per cent.

Pohokura is expected to produce 60-80PJ a year over 10-15 years from mid-2006, helping to lessen the shortfall left by the rundown of the main Maui field in 2007.

In June the three companies signed a final $1 billion investment agreement to develop the field following deals to sell the first tranche of Pohokura gas to electricity generators and gas wholesalers including Contact Energy, Genesis Power and NGC Holdings.

Ms Rebstock today invited submissions on whether the revocation of its joint venture authorisation was appropriate.

- NZPA