Subject to ministerial approval, under the new joint venture agreement Shell, a world leader in deep water exploration and production with a 100 year history in New Zealand, will take a 50% share while the existing joint venture partners OMV and PTTEP retain 18% each and Mitsui Australia retains 14%.

Under the farm in agreement, Shell will pay its equity share (50%) of the previous costs of exploring Permits 50119 and 50120 as well as its share (50%) of the costs of the upcoming seismic programme, including a premium for joining the venture, with a total cost to Shell of around US$25 million. Beyond that, Shell will meet its share of costs as a joint venture partner.

OMV New Zealand will remain operator of the Great South Basin permits until the end of the seismic acquisition programme which is expected to be completed in early 2012. The 3D programme itself will be undertaken by the state of-the-art vessel Polarcus Alima and is expected to cover about 3,000 km2.

Shell will become the joint venture’s operator once the seismic acquisition programme is completed.

“We are very pleased to announce these developments which we believe clearly demonstrate the joint venture’s commitment to the Great South Basin. It is important to be geared up for the next steps in the exploration of a frontier basin,” said OMV New Zealand Managing Director Peter Zeilinger.

“We have allocated significant manpower to studying the Great South Basin over the past four years and invested over NZ$50 million to date, with further investment planned,” he said.

In late 2010 OMV and its joint venture partners began an in-depth review of their planning for the Great South Basin. As part of that assessment, the joint venture identified the need for an additional partner with considerable deep water experience and best practice exploration and operating processes.

“We undertook a detailed evaluation of several companies who could meet these tests. Shell’s proven track record as an internationally experienced deep water operator with high safety and environmental standards made them the logical partner of choice,” Mr Zeilinger said.

Shell brings valuable technical expertise to the joint venture from safely delivering more than 20 groundbreaking deepwater projects around the globe. Shell’s membership in the Great South Basin joint venture builds on its continuing investment in Taranaki, where it is a joint venture partner in the Maui, Kapuni and Pohokura fields.

Chairman Shell Companies in New Zealand Rob Jager said the new Great South Basin venture reflected Shell’s continuing commitment to exploration and production in New Zealand.

“Shell has been investing in New Zealand for more than 100 years and safely operating offshore for more than 30 years in the challenging conditions off the coast of Taranaki. We have been impressed by the work of the joint venture to date, and see this as an exciting opportunity to bring our local and global experience to another promising region,” he said.

Exploring a new frontier area is very much a long term process, Mr Zeilinger explained.

“There are no guarantees that drilling will take place, but we are hopeful that the seismic survey will yield positive results. Our focus right now is on carrying out a robust survey,” he said.

Mr Jager said that as the new joint venture partner and future operator Shell is looking forward to working with OMV on the next stage of the project.

“Safety comes first for Shell. We have a Goal Zero operating philosophy which demands no harm to people and protect the environment. Another top priority is to get to know the local stakeholders better so that we have a strong understanding of their views and a positive foundation for continuing engagement over the coming years,” he said.

Media contacts:

For OMV: Chris Wikaira  on 027 452 2472 
For Shell: Jacqueline Baker on 027 477 5137

About the Great South Basin permits

GSB exploration permits 50119, 50120 and 50121, covering an area of almost 50,000 km2 were awarded to a joint venture consisting of OMV New Zealand (36%), Mitsui E&P Australia (36%) and PTTEP (28%) on 10 July 2007 with OMV as operator. Since then, the joint venture has spent over NZ$50 million on exploring the area, including the acquisition and analysis of 2D seismic data in 2007, 2008 and 2010.

The retained permits (PEP 50119 and PEP 50120) cover 32,213 km2. The permit work conditions require the joint venture to acquire a minimum of 2,250 km2 of 3D seismic data. Completing this work will enable the joint venture to apply for a second 5 year term for these permits. This will also include surrendering a further 50% of the permit areas held on 10 July 2012.

OMV in New Zealand

OMV New Zealand is the country’s largest liquid hydrocarbon producer, the third largest gas producer, and a major explorer in offshore Taranaki and the Great South Basin off the coast of the South Island. It has been active here since 1999 when it acquired shares in the Maari oil discovery which it developed and now operates. Focusing strictly on exploration and production in New Zealand, OMV New Zealand currently holds shares in the Maui and Pohokura gas fields and the Maui pipeline. In addition, OMV New Zealand also has a number of offshore exploration permits in the Taranaki region. OMV New Zealand is a subsidiary of OMV Aktiengesellschaft, also known as the OMV Group.

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Shell in New Zealand

Shell is a pioneer in New Zealand’s oil and gas sector. Since its first investment on the West Coast of the South Island in 1911, the company has helped to lay the foundations for today’s oil and gas industry. Shell is a joint venture owner and joint operator of the Maui (83%) and Kapuni (50%) fields, and joint venture owner and operator of the Pohokura (48%) field, in Taranaki. These assets provide around 70% of the country’s natural gas supply and employ some 300 staff.  Shell has been an active neighbour who regularly engages with the community, helping to create a vibrant society where kiwis live, work and play.

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