OMV New Zealand Limited and Shell

Total Page:16

File Type:pdf, Size:1020Kb

OMV New Zealand Limited and Shell PUBLIC VERSION OMV New Zealand Limited Application for Clearance of a Business Acquisition Under Section 66 of the Commerce Act 1986 Proposed Acquisition by OMV New Zealand Limited of Shares in Shell Exploration NZ Limited, Shell Taranaki Limited, Shell New Zealand (2011) Limited, and Energy Infrastructure Limited 15 June 2018 30750909_1.docx TABLE OF CONTENTS Part A: Executive Summary ................................................................................................. 5 The Parties .................................................................................................................. 5 The Transaction .......................................................................................................... 5 Affected Markets ......................................................................................................... 6 Counterfactual ............................................................................................................. 7 Industry Context .......................................................................................................... 8 No Substantial Lessening of Competition in the Natural Gas Market ........................ 8 No Substantial Lessening of Competition in the LPG Market .................................. 11 No Substantial Lessening of Competition in Markets for Other Assets ................... 12 Conclusion ................................................................................................................ 13 Part B: The Parties .............................................................................................................. 14 Acquiring Party .......................................................................................................... 14 Selling Party .............................................................................................................. 14 Part C: Transaction Details ................................................................................................ 16 Overview of Proposed Transaction ........................................................................... 16 Rationale for the Proposed Transaction ................................................................... 17 Transaction Documents ............................................................................................ 18 No Other Competition Agencies Being Notified ....................................................... 18 Separate Relevant Transactions .............................................................................. 18 Part D: Horizontal Overlap .................................................................................................. 19 Activities of the Parties to the Transaction ............................................................... 19 Relevant Overlaps Between the Parties ................................................................... 21 Required Documents/Information ............................................................................. 23 Part E: Market Definition ..................................................................................................... 24 Overview of Relevant Markets .................................................................................. 24 Product Dimension – Natural Gas, LPG and Oil/Condensate .................................. 24 Functional Levels ...................................................................................................... 24 Page 2 30750909_1.docx Geographic Dimension – Natural Gas and LPG ...................................................... 27 Geographic Dimension – Storage and Transportation by Pipeline .......................... 27 Time Dimension ........................................................................................................ 27 Miscellaneous Other Market Issues .......................................................................... 28 Conclusion on Relevant Market Definitions .............................................................. 30 Part F: Counterfactual ......................................................................................................... 31 Part G: The Industry ............................................................................................................ 32 Natural Gas & LPG Industry Overview ..................................................................... 32 Gas Industry .............................................................................................................. 32 LPG ........................................................................................................................... 52 Relevant Government Policy & Current Industry Trends ......................................... 55 Recent Merger Activity .............................................................................................. 56 Part H: Natural Gas Competition Assessment ................................................................. 58 Market Shares ........................................................................................................... 58 Constraint from Existing Competitors ...................................................................... 66 Constraints from Potential Competition .................................................................... 76 Countervailing Customer Power ............................................................................... 80 Conditions for Coordination Not Satisfied ................................................................. 83 Efficiencies ................................................................................................................ 83 Part I: LPG Competition Assessment .............................................................................. 84 Part J: Storage and Pipelines Competition Assessment ................................................ 85 Storage ...................................................................................................................... 85 Pipelines .................................................................................................................... 88 Part K: Confidentiality ......................................................................................................... 91 Part L: Declaration ............................................................................................................... 92 Appendices Appendix 1: Transaction Documents ........................................................................ 93 Appendix 2: Corporate Structure Charts ................................................................... 94 Page 3 30750909_1.docx Appendix 3: Each Party’s Most Recent Annual Report & Audited Financial Statements ................................................................................................................ 96 Appendix 4: Each Party’s Total Sales Revenues, Volumes, Capacity & Excess Capacity Figures ....................................................................................................... 97 Appendix 5: Names/Contact Details of Competitors & Industry Associations.......... 98 Appendix 6: Key Customer Details ......................................................................... 100 Appendix 7: Relevant Maps .................................................................................... 102 Appendix 8: Glossary of Terms ............................................................................... 105 Page 4 30750909_1.docx Part A: Executive Summary 1. OMV New Zealand Limited (OMV) is applying for clearance from the Commerce Commission to acquire 100% of the shares in Shell Exploration NZ Limited (SENZL), Energy Infrastructure Limited (EIL), Shell Taranaki Limited (Shell Taranaki), and Shell New Zealand (2011) Limited (Shell 2011) (together referred to as the Shell Companies). Shell Investments NZ Limited (SINZL) is currently the owner and vendor of all of the shares in the Shell Companies. The Parties 2. OMV is a New Zealand incorporated wholly owned subsidiary of OMV Aktiengesellschaft. OMV Aktiengesellschaft is an Austrian incorporated company engaged in producing and marketing oil, gas, and innovative energy and high-end petrochemical solutions. OMV Aktiengesellschaft is one of Austria's largest listed companies. 3. SINZL and the Shell Companies are wholly owned subsidiaries of Royal Dutch Shell plc. The latter is a multinational British-Dutch oil and gas company headquartered in the Netherlands and incorporated in the United Kingdom. It has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It has secondary listings on Euronext Amsterdam and the New York Stock Exchange. The Transaction 4. Under the proposed share purchase transaction (the Proposed Transaction), OMV will acquire the following assets from Shell: 4.1 a 48% participating interest in the joint venture relating to the Pohokura gas field (Pohokura JV) held by SENZL; 4.2 an 83.75% participating interest in the joint venture relating to the Maui gas field (being the part of the Maui mining permit down to 12,000 feet subsea) (Maui JV) – that 83.75% participating interest is held by Energy Petroleum Holdings Limited (EPHL) as to 18.75%, Energy Petroleum Taranaki Limited (EPTL) as to 38.75%, Taranaki Offshore Petroleum Company of New Zealand (TOPCO) as to 6.25%, and Energy Petroleum Investments Limited (EPIL) as to 20%. EPHL, EPTL and TOPCO are wholly owned subsidiaries of SENZL and EPIL
Recommended publications
  • Annual Report 2019
    ANNUAL REPORT SEPTEMBER 2019 Obligations creating opportunity “The best thing a senior leader can do is become incredibly interested, not in how the organisation failed to prevent the event, but in how the organisation failed to control the event…the presence of control is the magic potion for leaders.” Todd Conklin to Forum members, July 2019. www.zeroharm.org.nz Who we are The Forum is a group of CEOs, directors and country heads who are committed to becoming better leaders of health and safety in our organisations and industries. What we want for New Zealand Safe, healthy and productive workplaces. Why we’re here To engage, educate and elevate New Zealand CEOs so they have the skills and confidence to lead healthy and safe organisations. What we’ll do • Build CEO competence • Help CEOs influence and enable the workforce and supply chain • Connect CEOs to take more effective action • Help CEOs work with others to build the movement • Assess progress to deliver on our promises. “Every time I go to a Forum event I come away with a gem. I don’t walk away without thinking, wow, that was interesting.” “The Forum is a great vehicle, it’s a place I can be challenged in my views, learn from others and have a chance to refocus.” “The Forum’s Executive Leadership Programme is the best thing I ever did – it was real, gave me simple tactics and focused my energy on the heart and the mind of leadership.” CEO members 2019 3 Our members George Reed Craig Davidson Andrew Tombs Dean Brown General Manager Managing Director NZ CEO CEO 1st Maintenance
    [Show full text]
  • GNS Science Consultancy Report 2008/XXX
    Compilation of seismic reflection data from the Tasman Frontier region, southwest Pacific R. Sutherland P. Viskovic F. Bache V. Stagpoole J. Collot P. Rouillard T. Hashimoto R. Hackney K. Higgins N. Rollet M. Patriat W.R. Roest GNS Science Report 2012/01 March 2012 BIBLIOGRAPHIC REFERENCE 1Sutherland, R.; 1Viskovic, P.; 1Bache, F.; 1Stagpoole, V.; 2Collot, J.; 3Rouillard, P.; 4Hashimoto, T.; 4Hackney, R.; 4Higgins, K.; 4Rollet, N.; 5Patriat, M.; 5Roest, W.R; 2012. Compilation of seismic reflection data from the Tasman Frontier region, southwest Pacific, GNS Science Report 2012/01. 72 p. 1 GNS Science, PO Box 30368, Lower Hutt 5040, New Zealand 2 Service Géologique de Nouvelle-Calédonie (SGNC), Direction de l’Industrie des Mines et de l’Energie de Nouvelle Calédonie (DIMENC), B.P. 465, 98845 Nouméa, New Caledonia 3 Agence de Développement Economique de la Nouvelle-Calédonie (ADECAL), B.P. 2384, Nouméa, New Caledonia 4 Geoscience Australia, GPO Box 378, Canberra ACT 2601, Australia 5 Institut français de recherche pour l'exploitation de la mer (IFREMER), Géosciences marines, Département Ressources physiques et Ecosystèmes de fond de Mer, Institut Carnot EDROME, BP 70, 29280 Plouzané, France © Institute of Geological and Nuclear Sciences Limited, 2012 ISSN 1177-2458 ISBN 978-0-478-19879-9 CONTENTS ABSTRACT .......................................................................................................................... III ACKNOWLEDGEMENTS ....................................................................................................
    [Show full text]
  • Professional Profile Expertise Recent Experience Education
    Javaid Akhtar Partner PROFESSIONAL PROFILE [email protected] Dual qualified as a Solicitor of England and Wales and Advocate in Pakistan, +92 (51) 285 5890-2 Javaid specialises in acquisitions, oil and gas and arbitration and corporate and commercial matters. Javaid is the managing partner of the Islamabad 64, Nazimuddin Road, F- 8/4, Islamabad, Pakistan office of Vellani & Vellani and was earlier a partner of Amhurst Brown, which merged with Vellani & Vellani in 2018. https://www.linkedin.com/i n/javaid-akhtar-49051313/ RECENT EXPERIENCE EDUCATION ACQUISITIONS Represented local and multinational companies in the sale and Bachelor of Law (LL. B) King’s College London - 1991 purchase of assets and shares, particularly in the upstream oil and gas sector. Acted in the purchase of Austrian owned OMV companies in Pakistan EXPERTISE (2017-8) and UK owned Premier Oil companies in Pakistan (2016), and a substantial holding in a Pakistani oil marketing company to a Dispute Resolution middle-eastern company (2018). Earlier, acted in the sale of BP’s Mergers & Acquisitions, assets in Pakistan (2011-14), purchase of Tullow Pakistan (2014) and Restructuring and aspects of the sale of Petronas Carigali Pakistan (2011). Securities Acted on the buy-side in relation to the Government of Pakistan’s sale Oil & Gas of companies and assets (i.e. privatization), including sale of state interests in petroleum concessions; in Pakistan Steel Corporation and Pakistan State Oil Ltd. Apart from the customary suite of agreements, such transactions involved extensive due diligence and, often protracted, issues to be resolved with regulatory authorities (including the Directorate General (Petroleum Concessions), the Competition Commission of Pakistan and the Securities and Exchange Commission of Pakistan).
    [Show full text]
  • Slovenia: MOL Group' Retail Acquirement Agreement With
    Slovenia: MOL Group’ retail acquirement agreement with OMV The agreed purchase price is 301 million euros (100 % share of OMV Slovenia); MOL Group reached an agreement with OMV to acquire OMV’s 92.25 % stake in OMV Slovenia, in which Croatian INA already holds a 7.75 % minority stake, from OMV Downstream GmbH as direct shareholder. The transaction includes 120 petrol stations across Slovenia. OMV Slovenia operates in the country under 3 brands: OMV (108), EuroTruck (4) and Avanti/DISKONT (8). MOL Group and INA will become the 100 % owner of the wholesale business of the acquired company, as well. With 48 MOL and 5 INA-branded service stations in Slovenia, MOL Group is currently the third largest retail market-player. However, the transaction is still subject to merger clearance. The acquisition fits into the Group’s SHAPE TOMORROW 2030+ updated long-term strategy, which places a special emphasis on the development of Consumer Services. MOL Group CEO Zsolt Hernadi said that this step is in line with group’s strategic goals to further expand retail fuel network in existing and potential new markets in central and eastern Europe. By 2025, MOL Group would like to reach 2200 petrol stations, potentially more, if more good opportunities arise. With constant development and digitization, shaping future consumer and mobility trends, MOL offers convenience as it aims to help people on the move, regardless of what powers the customer’s mode of transport. Furthermore, its integrated business model and accelerating growth enables it to provide financial resources for developing sustainable solutions and boosting circular economy in the region.
    [Show full text]
  • Analiza Efikasnosti Naftnih Kompanija U Srbiji Efficency Analysis of Oil Companies in Serbia
    ________________________________________________________________________ 79 Analiza efikasnosti naftnih kompanija u Srbiji Efficency Analysis of Oil Companies in Serbia prof. dr. sc. Radojko Lukić Ekonomski fakultet u Beogradu [email protected] Ključne reči: ekspolatacija sirove nafte i gasa, Abstract tržišno učešće, efikasnost poslovanja, financijske Lately, significant attention has been paid to the performanse, održivo izveštavanje evolution of the performance of oil companies around Key words: exploration of crude oil and gas, market the world, by individual regions and countries. Bearing share, business efficiency, financial performance, susta- this in mind, relying on the existing theoretical and inable reporting methodological and empirical results, this paper analyzes the efficiency of operations, financial perfor- mance and sustainable reporting of oil companies in Sažetak Serbia, with special emphasis on the Petroleum Industry of Serbia (NIS). The results of the survey show signifi- U poslednje vreme značajna se pažnja poklanja cant role of mining, i.e. oil companies in creating addi- evoluaciji performansi naftnih kompanija u svetu, tional value of the entire economy of Serbia. Concer- po pojedinim regionima i zemljama. Imajući to u ning the Petroleum Industry of Serbia, it has a signi- vidu, oslanjajući se na postojeće teorijsko-metodo- ficant place in the production and trade of petroleum loške i empirijske rezultate, u ovom radu se analizi- products in Serbia. For these reasons, the efficiency of raju efikasnosti poslovanja, finansijske performanse operations, financial performance and maintenance of i održivo izveštavanje naftnih kompanija u Srbiji, s the Petroleum Industry of Serbia has been complexly posebnim osvrtom na Naftnu industriju Srbije (NIS). analyzed. In this respect, according to many indicators, Rezultati istraživanja pokazuju značajnu ulogu rudar- it is at a satisfactory level in relation to the average of the stva, odnosno naftnih kompanija u kreiranju dodatne world’s leading oil companies.
    [Show full text]
  • Nord Stream 2: Background, Objections, and Possible Outcomes Steven Pifer
    NORD STREAM 2: BACKGROUND, OBJECTIONS, AND POSSIBLE OUTCOMES STEVEN PIFER APRIL 2021 EXECUTIVE SUMMARY Nord Stream 2 is an almost-finished natural gas pipeline from Russia to Germany. The Biden administration opposes it and has come under congressional pressure to invoke sanctions to prevent its completion, in large part because the pipeline seems a geopolitical project targeted at Ukraine. The German government, however, regards the pipeline as a “commercial project” and appears committed to its completion, perhaps in the next few months. U.S. sanctions applied on Russian entities to date have failed to stop Nord Stream 2, raising the question of whether the U.S. government would sanction German and other European companies for servicing or certifying the pipeline. Such sanctions would provoke controversy with Germany at a time when both Berlin and the Biden administration seek to rebuild good relations. The two sides have work to do if they wish to avoid Nord Stream 2 becoming a major point of U.S.-German contention. THE PIPELINE The European Union currently imports about 40% of its natural gas from Russia, or about one-third Nord Stream 2 is actually a pair of natural gas of its total gas consumption.4 Gazprom began pipelines that, if/when completed, will run some discussions with European companies on a direct 1,200 kilometers along the bottom of the Baltic Russia-Germany gas pipeline in 2001. At that time, 1 Sea from Ust-Luga, Russia to Greifswald, Germany. it shipped gas to western Europe via pipelines that The two pipelines, collectively referred to as Nord mainly transited Ukraine, and also Belarus and Stream 2, are projected to have the capacity to Poland (the Yamal system).
    [Show full text]
  • The Commercial Deals Connected with Gazprom's Nord Stream 2
    The commercial deals connected with Gazprom's Nord Stream 2 A review of strings and benefits attached to the controversial Russian pipelines Anke Schmidt-Felzmann, PhD Senior Researcher at the Research Centre of the General Jonas Žemaitis Military Academy of Lithuania Abstract This paper reviews the multiple strings and benefits attached to the single most controversial gas pipeline project in Europe - the second Russian twin subsea pipeline that is currently under construction in the Baltic Sea. While much attention has been paid to the question of why and how the Russian state- controlled energy giant seeks to circumvent Ukraine as a transit country for its delivery of gas to Western Europe, hardly any attention has been paid to the benefits gained by the companies and political entities directly involved in the preparation and construction of Nord Stream 2. The paper seeks to fill this gap in the debate by taking a closer look at the business deals and commercial actors involved in the implementation of this second Russian natural gas pipeline project in the Baltic Sea. It highlights how local and national economic interests and European energy companies' motivations for participating in the project go beyond the volumes of Russian natural gas that Gazprom expects to deliver to European customers through its Baltic Sea pipelines from 2020. Keywords: Baltic Sea, Nord Stream, Gazprom, Russia, Germany, Sweden, Denmark, Finland, Latvia. This analysis was produced within the Think Visegrad Non-V4 Fellowship programme. Think Visegrad – V4 Think Tank Platform is a network for structured dialog on issues of strategic regional importance. The network analyses key issues for the Visegrad Group, and provides recommendations to the governments of V4 countries, the annual presidencies of the group, and the International Visegrad Fund.
    [Show full text]
  • Marine Discharge Consent Application ‐ Deck Drainage
    MARINE DISCHARGE CONSENT APPLICATION ‐ DECK DRAINAGE Taranaki Basin Prepared for: OMV New Zealand Limited The Majestic Centre Level 20, 100 Willis Street PO Box 2621, Wellington 6015 New Zealand SLR Ref: 740.10078.00000 Version No: ‐v1.0 March 2018 OMV New Zealand Limited SLR Ref No: 740.10078.00000‐R01 Marine Discharge Consent Application ‐ Deck Drainage Filename: 740.10078.00000‐R01‐v1.0 Marine Discharge Consent Taranaki Basin 20180326 (FINAL).docx March 2018 PREPARED BY SLR Consulting NZ Limited Company Number 2443058 5 Duncan Street Port Nelson 7010, Nelson New Zealand T: +64 274 898 628 E: [email protected] www.slrconsulting.com BASIS OF REPORT This report has been prepared by SLR Consulting NZ Limited with all reasonable skill, care and diligence, and taking account of the timescale and resources allocated to it by agreement with OMV New Zealand Limited. Information reported herein is based on the interpretation of data collected, which has been accepted in good faith as being accurate and valid. This report is for the exclusive use of OMV New Zealand Limited. No warranties or guarantees are expressed or should be inferred by any third parties. This report may not be relied upon by other parties without written consent from SLR SLR disclaims any responsibility to the Client and others in respect of any matters outside the agreed scope of the work. DOCUMENT CONTROL Reference Date Prepared Checked Authorised 740.10078.00000‐R01‐v1.0 26 March 2018 SLR Consulting NZ Ltd Dan Govier Dan Govier 740.10078.00000‐R01‐v1.0 Marine Discharge Consent 20180326 (FINAL).docx Page 2 OMV New Zealand Limited SLR Ref No: 740.10078.00000‐R01 Marine Discharge Consent Application ‐ Deck Drainage Filename: 740.10078.00000‐R01‐v1.0 Marine Discharge Consent Taranaki Basin 20180326 (FINAL).docx March 2018 EXECUTIVE SUMMARY OMV New Zealand Limited (OMV New Zealand) is applying for a Marine Discharge Consent (hereafter referred to as a Discharge Consent) under Section 38 of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 (EEZ Act).
    [Show full text]
  • SECTION 42A REPORT Designations
    SECTION 42a REPORT Designations 1 Executive summary ................................................................................. 3 2 Introduction ........................................................................................... 4 2.1 Author and qualifications ........................................................................... 4 2.2 Code of Conduct ........................................................................................ 4 2.3 The Council versus NPDC ........................................................................... 4 2.4 Expert Advice ............................................................................................ 4 3 Scope / Purpose of Report ...................................................................... 5 4 Statutory Requirements .......................................................................... 5 4.1 Designation requirements .......................................................................... 5 4.2 Procedural matters .................................................................................... 6 4.3 Section 32AA evaluation .......................................................................... 13 5 Consideration of designations ............................................................... 13 5.1 Overview of submissions received ............................................................ 13 5.2 Chorus New Zealand Limited .................................................................... 14 5.3 First Gas Limited.....................................................................................
    [Show full text]
  • Exploration of New Zealand's Deepwater Frontier * GNS Science
    exploration of New Zealand’s deepwater frontier The New Zealand Exclusive Economic Zone (EEZ) is the 4th largest in the world at about GNS Science Petroleum Research Newsletter 4 million square kilometres or about half the land area of Australia. The Legal Continental February 2008 Shelf claim presently before the United Nations, may add another 1.7 million square kilometres to New Zealand’s jurisdiction. About 30 percent of the EEZ is underlain by sedimentary basins that may be thick enough to generate and trap petroleum. Although introduction small to medium sized discoveries continue to be made in New Zealand, big oil has so far This informal newsletter is produced to tell the eluded the exploration companies. industry about highlights in petroleum-related research at GNS Science. We want to inform Exploration of the New Zealand EEZ has you about research that is going on, and barely started. Deepwater wells will be provide useful information for your operations. drilled in the next few years and encouraging We welcome your opinions and feedback. results would kick start the New Zealand deepwater exploration effort. Research Petroleum research at GNS Science efforts have identified a number of other potential petroleum basins around New Our research programme on New Zealand's Zealand, including the Pegasus Sub-basin, Petroleum Resources receives $2.4M p.a. of basins in the Outer Campbell Plateau, the government funding, through the Foundation of deepwater Solander Basin, the Bellona Basin Research Science and Technology (FRST), between the Challenger Plateau and Lord and is one of the largest research programmes in GNS Science.
    [Show full text]
  • A Case Study of the South Taranaki District
    The Impact of Big Box Retailing on the Future of Rural SME Retail Businesses: A Case Study of the South Taranaki District Donald McGregor Stockwell A thesis submitted to Auckland University of Technology in fulfilment of the requirements for the degree of Master of Philosophy 2009 Institute of Public Policy Primary Supervisor Dr Love Chile TABLE OF CONTENTS Page ATTESTATION OF AUTHORSHIP ........................................................................ 7 ACKNOWLEDGEMENT ............................................................................................ 8 ABSTRACT ................................................................................................................... 9 CHAPTER ONE: INTRODUCTION AND BACKGROUND TO THE STUDY ................................ 10 CHAPTER TWO: GEOGRAPHICAL AND HISTORICAL BACKGROUND TO THE TARANAKI REGION................................................................................................ 16 2.1 Location and Geographical Features of the Taranaki Region ............................. 16 2.2 A Brief Historical Background to the Taranaki Region ...................................... 22 CHAPTER THREE: MAJOR DRIVERS OF THE SOUTH TARANAKI ECONOMY ......................... 24 3.1 Introduction ......................................................................................................... 24 3.2 The Processing Sector Associated with the Dairy Industry ................................ 25 3.3 Oil and Gas Industry in the South Taranaki District ..........................................
    [Show full text]
  • Oil and Gas Security
    NEW ZEALAND OVERVIEW _______________________________________________________________________ 3 1. Energy Outlook _________________________________________________________________ 4 2. Oil ___________________________________________________________________________ 5 2.1 Market Features and Key Issues ___________________________________________________________ 5 2.2 Oil Supply Infrastructure _________________________________________________________________ 8 2.3 Decision-making Structure for Oil Emergencies ______________________________________________ 10 2.4 Stocks _______________________________________________________________________________ 10 3. Other Measures _______________________________________________________________ 12 3.1 Demand Restraint ______________________________________________________________________ 12 3.2 Fuel Switching _________________________________________________________________________ 13 3.3 Surge Oil Production ____________________________________________________________________ 14 3.4 Relaxing Fuel Specifications ______________________________________________________________ 14 4. Natural Gas ___________________________________________________________________ 15 4.1 Market Features and Key Issues __________________________________________________________ 15 4.2 Natural Gas Supply Infrastructure _________________________________________________________ 17 4.3 Emergency Policy for Natural Gas _________________________________________________________ 18 List of Figures Total Primary Energy Supply .................................................................................................................................4
    [Show full text]