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Tuesday, March 30, 2010

Downstream assets: Shell out

As long as Shell/Todd interests can keep their supply lines and contracts I suppose it is really the upstream assets that actually count. Let the Gulls have at it on the margins - that sort of ticket-clipping is not where the maximum value lies.

Royal Dutch Shell:

Shell will receive a cash payment of NZ$696.5 million together with a working capital adjustment. In addition, the companies have signed an agreement for Shell to continue to provide crude oil and refined products. The parties have also entered into a trademark licensing agreement which entitles the consortium to operate retail service stations under the Shell brand.

$696.5m is close to the amount of money Cullen pissed away on buying the Australians out of the unprofitable railways incidentally. Nowadays the Cullen Fund has to provide the means of nationalisation rather than the Finance Minister writing cheques from surpluses (not that any Tory treasurer of modern times could contemplate doing that). But $212.5 million looks more like ballast for other players in the shallow "downstream" retail distribution end. They'll be paying a lot for the conditional use of the Shell name while they attempt to operate it like a master franchise developing their own brand with all the sites - that's what $700m seems to be buying. But it's undoubtedly a seat at the cartel table:

Shell will sell its 17.1% shareholding in the 104,000-barrel per day refinery at Marsden Point

And how to sell an investment - a 50:50 private-public partnership - in the unsustainable mining and pollution sector? Call it something green...

It will trade under the name of Greenstone Energy Limited.

Involving the super fund does tie the nation's future to oil and that's a very good fit for the Nats and their chums. The lads will be very happy with this deal. Keep it all in the family. The Todd family in particular.

Through them also Exxon-Mobil. That's a fine club, with strong Anglo-Persian, British Petroleum pedigree. BP, incidentally, sees its own corporate history in NZ in terms of international and local politics - they say National governments sold out the Crown stake to them in the fifties and allowed them to put lead into regular petrol in the eighties (our third world regulations were appalling), amongst other achievements.

So who would want to try to fund a universal pension system by way of the sale and mass consumption of toxic hydrocarbons for generations to come? Yeah, us. 1.3% of the current value of the NZ Super Fund, by my back of the envelope figures, are now dedicated to operating this chain of petrol stations.

So what you want to do is pop along to the Greenstone energy centre - the Kiwibank of petrol stations - and choke our atmosphere with the fumes of petrol at least partially owned by New Zealanders. For us. For the future.

Go well, go Shell.


At 30/3/10 4:59 pm, Anonymous Anonymous said...

Just rebrand the fucking thing......call it Pipi or papa or something similar. At least its a step forward (unintentional)

At 31/3/10 8:37 am, Anonymous Sam Clemenz said...

This is Oil Companies doing what Oil Companies do - Capitalize on the Consumer, and the Commodities they control.
It's just one more hand in the Consumers pocket that will increase user costs - What else is new?


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