Mood lifts over sale even if flags don't

By PAULA OLIVER

Flags were flying half-mast at Fletcher Energy's Taranaki headquarters yesterday, but the province's business chiefs were surprisingly more upbeat at the news that Royal Dutch Shell and Apache had clearance to buy the local energy giant.

After hailing the potential deal as "disastrous" and making strong statements against it, Taranaki's heads have been forced to adopt a more submissive mood.

Some said the decision finally gave some certainty, and projects that had been sitting on hold could now begin.

But others argued that there was more uncertainty than ever before, because nobody knew who would take control of the assets Shell will have to sell. Major concerns in Taranaki had centred around potential job losses at Fletcher Energy, and the rumour that Methanex could close its operations if future gas supplies were not forthcoming.

Fletcher Energy staff themselves were worried about their jobs, as they lowered the company's flags to half-mast.

Sustainable business services manager Rachel Palmer said staff were disappointed, because they were keen to have a go at being a standalone company.

"People are realistic, and they know it's inevitable there will be some job losses," she said.

"But we've had a briefing from Shell this afternoon, and they are looking to keep people with skills and expertise.

"We are being pragmatic and realistic."

Taranaki Chamber of Commerce chairman John Rae said he was not surprised by the clearance, but he was concerned that Shell had still not come forward and detailed a long-term plan. "Obviously, if there are redundancies, then local businesses will be hurt.

"I've heard as many as 50 might go from Fletcher in Taranaki, and more in Auckland."

The best result now would be for a strong American company to come and buy up all the available assets, Mr Rae said.

He described the development of Pohokura gasfield as crucial to the region.

"If Pohokura is not developed, there has to be some concern for the long-term future of Methanex in New Zealand, and that is not only for the staff, but also the support services around them."

Methanex employs about 250 local people.

Engineering Taranaki, a consortium that deals with both Shell and Fletcher Energy, said the deal was positive.

Chairman Warren Batchelar was confident Shell would continue to support the local industry by commissioning local businesses to complete jobs.

Stuart Trundle, chief executive of Venture Taranaki, which runs economic development in the region, said he had concerns about job losses in the area, but was confident Shell would want to hang on to Fletcher's employees.

"The last thing they would want to lose is a competitive advantage the people may give them," he said. "We've had the largest uncertainty removed, and we have a long-term commitment from Shell to the area. Now we would like to see a long-term commitment to Pohokura."