Shell seeks clearance for £900m NZ buy

Royal Dutch Shell, the oil exploration and production giant, yesterday stepped up its interest in buying Fletcher Challenge Energy, New Zealand's largest energy company.

Royal Dutch Shell, the oil exploration and production giant, yesterday stepped up its interest in buying Fletcher Challenge Energy, New Zealand's largest energy company.

Edwin Johnson, chairman of Shell New Zealand, said that Shell had asked the Commerce Commission for clearance to make an offer for the business, which could fetch up to NZ$3bn (£900m).

The commission vets deals to prevent companies acquiring market dominance. Fletcher Challenge Energy's main asset is its 68 per cent holding in the Maui oil and gas field, the country's largest. Shell has an 18.75 per cent interest in the field. Mr Johnson said Shell was interested in buying only Fletcher Energy's New Zealand operations. The target company also has interests in Brunei, Canada and Venezuela. BP Amoco, Chevron, Enron and Unocal are reported to have undertaken due diligence of the company.

Analysts said buying Fletcher Challenge Energy would help Shell cut costs. It may also form part of a wider deal with Woodside Petroleum, the Australian oil and gas producer in which Shell has a 34 per cent stake.

In May, Shell offered to swap a package of upstream assets, including some in New Zealand, in exchange for control of Woodside. The move was rejected by Woodside and analysts say Shell is mulling a revised approach.