Swift Energy is paying Shell New Zealand more than $120 million for the lion's share of four oil and gas fields in Taranaki.
The Houston-based company says the deal to buy the the Tariki, Ahuroa, Waihapa and Ngaere (Tawn) fields will help it process, transport and market its own Rimu and
Kauri oil and gas, together with the existing production from the fields.
It also believes the agreement will speed up the exploration and development of the potentially huge energy resources in the central-southern onshore Taranaki region.
The deal is the first of the $600 million worth of divestments Shell promised the Commerce Commission it would make when it bought the New Zealand assets of Fletcher Challenge early this year.
Company president Terry Swift says his company was delighted with the purchase of 96.76 per cent of the field facilities. Todd Energy and Brisbane-based Bligh Oil and Minerals retain their 3.24 per cent stake.
"By building pipelines from the Rimu-Kauri area to the Waihapa production station, we will be able to export crude oil at New Plymouth and transport natural gas to electrical generation facilities through our own pipelines," he said.
Swift Energy also had agreements with Shell NZ to use oil storage facilities at Omata, near New Plymouth, hydrocarbon transport and crude oil marketing, he said.
Swift also intends offering Shell the option to take part in future exploration and development of several deep oil and gas horizons within the Tawn licences. The Commerce Commission two months ago cleared Shell to buy back into the so-called "Tawn deep rights".
Once the Tawn sale is finalised early next year, Shell will also have the option of buying from Swift a 25 per cent stake in the Rimu-Kauri fields, including the present $25 million Rimu production station, and future exploration and development programmes.
Swift believes the Rimu-Kauri and other nearby prospects could contain up to 1000 million barrels of oil.
More Shell divestments, including the sale of the McKee and Mangahewa oil and gas fields, are expected this week.
- NZPA
