New Shell owners fight back against 'big oil' tag

Shell owner Greenstone Energy says it needs to evolve as a local entity. Photo / Paul Estcourt

The new owners of Shell are not happy about being lumped in with "big oil" by Australian-owned Gull and are working on a strategy to stake out their New Zealand credentials.

Chairman of Gull Group Neil Rae said nothing he had seen from Shell, since April owned by Greenstone Energy, suggested much had changed.

"I think as long as there's a big Shell brand hanging off them I don't think anyone is going to buy the fact that they're anything more than part of the club."

Greenstone is the operating company for the Shell investment by Infratil and the New Zealand Superannuation Fund. Its chief executive Mike Bennetts takes issue with the Gull assessment.

"The game may remain the same and right now we're playing in the same jersey in the sense we have the Shell brand out there but in our view that needs to be better positioned to be reflective of our local ownership."

Bennetts said during the first two months of ownership, the company had been concentrating on operational continuity.

"In Greenstone we inherited everything that we bought from Shell including our various corporate stands and we're doing work now on our strategy including where we stand on issues such as minimum wage, Emissions Trading Scheme and sustainability in the context of local owners being in charge of a local company."

While the industry may have previously raised concerns about the ETS, Shell was now a new entity.

"I don't consider ourselves to be part of big oil, we are the largest independent and we will do what we think is right for New Zealand and [for example] that means we might have a more proactive and positive approach to biofuels than Shell did in the past," said Bennetts.

While this could include selling more blended fuels to motorists, the company was also looking to sell more biofuel to commercial users such as tourist operators.

Without undermining the Shell logo it needed to evolve as a local company and "there are things we are seriously considering to step out from what Shell used to do and be much more local and focused on local issues," he said.

"We're not doing anything at the moment - we're thinking hard about it. This is a big company. It's been very successful. We need to think carefully about where we want to go."

Decisions on Shell's local strategy would be made later this year, said Bennetts.

Gull's Rae said he hoped this would include breaking open the "oligopoly" that exists. His company was prevented from storage facilities in many parts of the country which now had to be supplied by truck daily.

"If we were able to do business with major oil as they do with each other we'd seriously be able to reduce our carbon footprint."

Bennetts said those arrangements would be reviewed.

"Those are industry arrangements that we have inherited. They are regularly reviewed by the Commerce Commission to make sure they are not anti-competitive and to the best of my knowledge they have always been given an appropriate endorsement."

Co-operation through sections of the supply chain had helped keep prices down in New Zealand, he said.

Figures released yesterday by the Ministry of Economic Development, based on International Energy Association data, found New Zealand has the cheapest petrol, after government taxes, behind the United States, Mexico and Canada.

Prices will rise by around 3c a litre after ETS begins in July.

Rae said his company supported the ETS, as it would encourage biofuel development.

"That is a worry to any motorist who is going to have to pay more for their fuel but on the other hand what's the alternative? There needs to be a price signal on carbon so we can promote alternative fuel."