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New Zealand Oil & Gas (NZOG) has been cleared to increase its stake in Australian-based Pan Pacific Petroleum beyond its 15 per cent holding.
The Australian Foreign Investment Review Board said yesterday it had no objection to NZOG acquiring up to 19.99 per cent, or all of Pan Pacific.
"In due course, NZOG will assess its position to determine what, if any, further steps might be taken," the company said.
NZOG has spent around $30 million building a stake in Pan Pacific - a Tui field partner - in the first big spending programme of more than $230 million of its cash reserves it had amassed in revenue from the Tui field.
NZOG has a 12.5 per cent stake in Tui and Pan Pacific has 10 per cent.
Tony Radford, who chaired both companies, resigned as chairman of Pan Pacific Petroleum on Boxing Day.
Pan Pacific has said it would now review a process aimed at managing any potential conflict issues relating to Radford's roles, following his
resignation.
Pan Pacific has also told shareholders they should note that NZOG had acquired its interest in Pan Pacific shares at prices up to A30c per share, not significantly higher than Pan Pacific's cash backing per share of A25c.
The company said current market trading prices placed negligible value on its Tui stake, with remaining reserves net to Pan Pacific at the end of November comprising 3.1 million barrels.
Radford was replaced as chairman by Neil Tomkinson and Australian corporate investor and director Joshua Pitt was appointed to its board.
Tui area partners have pumped more than 20 million barrels from Tui in the 18 months since production began on July 30, 2007.
The Tui area oil field includes three producing reservoirs, Tui, Amokura and Pateke and lies 50km off the Taranaki coast.
Other joint venture partners are Australian Worldwide Exploration (42.5 per cent) and Mitsui (35 per cent.)
