Asia Pulse News: INTEROIL TO BUY SHELL PNG: “InterOil Corporation will become a major distributor of petroleum products in Papua New Guinea as it agrees in principle to purchase Shell PNG Limited assets…”: Wednesday November 23, 2005
PORT MORESBY, Nov 23 Asia Pulse - InterOil Corporation will become a major distributor of petroleum products in Papua New Guinea as it agrees in principle to purchase Shell PNG Limited assets, Post Courier reports.
Royal Dutch Shell Group announced yesterday that it had reached an in principle agreement for a revised deal structure covering the sale of 100 per cent of its shares in Shell Papua New Guinea Limited to InterOil Products Limited.
The deal is subject to the relevant PNG Government authority and Independent Consumer and Competition Commission approvals.
InterOil Products Limited is a subsidiary of InterOil Corporation. The company bought off BP wholesale and distribution assets last year.
Shell said the major revision to the original deal with InterOil involved the abandonment of a lease-back arrangement, which would have seen Shell continue to be a major participant in the downstream market. The new deal sees the business being sold as a going concern to InterOil.
This decision is consistent with the Shell Group and downstream strategy of active portfolio management. As part of this strategy, we have reviewed Shells downstream business in PNG, Shell said in a statement yesterday.
Shell Group said in general, Shell in PNG operated in a market with good long-term prospects, a loyal customer base, professional staff and reliable business partners but according to the company's perspective; the business in PNG remained small.
Shell and InterOil have thus reached in principle agreement for the sale of Shell PNG for the following reasons:
- The business has a history of good cash and operational performance, however, Shell is focusing its portfolio toward fewer, larger scale businesses, and
- The business is of higher value to a company with differing management priorities and capital focus.
"We expect that InterOil will be able to create additional value from our business activities and high quality operations in PNG," Shell said.
Shell's interest in the Jacksons airfield and its associated aviation business is not part of this sale.
Shell also announced that it was considering the sale of its businesses in more Pacific Islands.
The company said an information memorandum, inviting expressions of interest in the business was being released to a short list of potentially interested buyers.
The information memorandum covers Shells downstream sales and marketing businesses in the Solomon Islands, Fiji, Tonga, Samoa, the Cook Islands, New Caledonia and Vanuatu.
(Pacnews)
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