Shell lifts assets-for-sale number to buy Energy

Shell has offered to sell more of the Fletcher Challenge Energy assets in a second bid to satisfy Commerce Commission competition concerns.

A second application to buy Fletcher Energy was lodged yesterday after the competition watchdog stopped the $4.6 billion sale of Energy to Shell and Texas oil group Apache in its tracks a week ago, because it considered Shell would dominate the gas market.

The second application was made public only after the market closed. Fletcher Energy shares closed 28c up at 864c.

In its first application, Shell had offered to sell a package of Energy assets. Yesterday, it said it would also sell within 12 months:

Energy's equity interest in the Tariki, Ahuroa, Waihapa and Ngaere field, known as Tawn. It has an 18.75 per cent stake.

*Energy's equity interest in the Ngatoro (59.57 per cent) and the McKee fields.

*A 10 per cent equity interest in the Maui field. Fletcher Energy has a 68.75 per cent holding in Maui and Shell has 18.75 per cent.

*A 3.66 equity interest in the Pohokura field and in the petroleum exploration permit associated with that field, along with an equivalent interest in the joint venture. That would reduce its equity stake to 48 per cent post-merger.

Last night, commission chairman John Belgrave said it would investigate what impact these sales would have on the gas markets about which it had competition concerns.

The Commerce Act gives the commission 10 working days - until November 6 - to make a decision on the new application but that could be extended.

In its first application, Shell promised to sell the retail petrol business of Challenge Petroleum; its 14.2 per cent stake in NZ Refining Company; its equity interest in the Kupe field and in Kapuni Gas Contracts; and its stake in Fletcher Challenge Gas Investment.

Energy said yesterday that it had sold the 14.2 per cent holding in NZ Refining for $34 million to Emerald Capital, a private investment company.

Chief executive Michael Andrews said the proceeds would be used by Rubicon, a company formed as part of a proposed restructuring of the group, to buy the biotechnology and South American forestry assets of Fletcher Challenge Forests and to underwrite a rights issue for Forests.

- NZPA