NZ Genesis Picks Up Extra Stake in Kupe Field

New Zealand’s power generator Genesis Energy has acquired an additional 15% stake in Kupe oil and gas field from New Zealand Oil & Gas for NZ$168mn ($119mn). The move takes Genesis’ stake to 46%. Australian Origin Energy's 50% and Japanese Mitsui's 4% interests are left unchanged. 

“The Kupe field is a world class asset producing oil, piped gas and bottled gas. The increased stake enables Genesis Energy to access and manage more flexible fuel supply well into the next decade,” Genesis CEO Marc England said in a statement issued November 16.

The acquisition will involve the purchase of 100% of the shares in three subsidiaries of NZOG that are the holding companies for its 15% stake, plus 100% of a subsidiary that has rights to royalty payments associated with the Kupe field. The increase in ownership will give Genesis access to about 160,000 extra barrels of oil and 13,000 additional metric tons of LPG per annum. It currently purchases 100% of the gas offtake from Kupe. The increased equity stake will also give Genesis ownership of an additional 26 petajoules of uncontracted gas beyond 2020, the company said.

The company will fund the purchase by existing debt facilities and is effective January 1, 2017. It aims to complete the deal by Christmas 2016.

Kupe commenced commercial production in March 2010 and is an important part of New Zealand's energy infrastructure, according to Genesis, and is expected to meet roughly 11% of New Zealand's annual gas demand and approximately 50% of New Zealand's anticipated LPG demand until 2025. The field is located to the southwest of New Zealand's North Island.

Shardul Sharma