Chevron sells out of NZ Refining

Oil company Chevron New Zealand, operator of Caltex service stations, is selling its holding in the Marsden Point refinery.

Chevron’s 11.4% stake in New Zealand Refining [NZX: NZR] is being sold by broker Deutsche Craigs through a bookbuild.

NZ Refining shares have been placed on trading halt until the trade is complete.

At the last market price of $2.52 the stake would be worth about $89 million, although it is likely to be sold at a moderate discount.

Buyers are likely to be institutions and private investors.

Deutsche Craigs says it has agreed to purchase the stake for at least $2.32 a share under its block trade agreement and will underwrite the sale.

In an announcement to the stock exchange this morning, NZ Refining says the sale does not affect Chevron’s fuel processing agreements with the refinery.

The other main shareholders in NZ Refining are BP with 21%, Mobil with 17% and Z Energy with 15%.

A Chevron spokesman says the sale is “in line with Chevron’s long-term strategy”.

“Asia-Pacific remains a core strategic focus for Chevron’s Downstream business and we are focused on ensuring our operations, portfolio and investments are well-positioned to meet the region’s growing demand for energy.”

Chevron also owns 147 Caltex service stations and 73 Caltex unstaffed diesel fuel filling stations serving the trucking industry.

Asked whether these assets are also for sale the spokesman would only say “we do not comment on speculation”.

In December Chevron announced a separate Bermuda registered company, Chevron New Zealand Exploration, got exploration rights to three blocks 161 km east of Wellington in the Pegasus and East Coast basins. Chevron will be the operator of the block with a 50% working interest. Statoil has the other 50%. Seismic surveys are due to begin next year.

The spokesman says the NZ Refining sale does not alter those exploration plans.

Chevron is currently restructuring its New Zealand units, with Chevron New Zealand Holdings being liquidated and its shares in Chevron New Zealand being transferred to Chevron South Asia Holdings in Singapore.

In the year to December Chevron New Zealand Holdings had revenue of $2.2 billion and net profit of $43m, down from a profit of $86m in 2013.

The company’s defined benefit pension scheme was in deficit by $20m.