New Zealand Refining Co. (NZR.NZ) will go ahead with plans for a NZ$365 million (US$296 million) expansion of its refinery on the east coast of New Zealand's North Island after gaining majority shareholder support at a general meeting Friday, despite misgivings among some of the oil majors that own company stock.
BP PLC (BP), the largest New Zealand Refining shareholder, supported the move, as did Z Energy Ltd., which in 2010 bought Royal Dutch Shell PLC's (RDSB.LN) downstream assets in New Zealand. Exxon Mobil Corp.(XOM) and Chevron (CVX) also own stakes in New Zealand Refining but declined to reveal how they voted at the shareholder meeting. New Zealand Refining said 44% of the voting shares of oil majors didn't support the move.
"We believed the case for the CCR [Continuous Catalytic Regeneration] project was compelling for our shareholders and so it has proved to be," New Zealand Refining Chief Executive Ken Rivers said in a statement.
The 115,000-barrel-a-day Marsden Pt. oil refinery is the country's only oil refiner. It provides around 40% of New Zealand's total energy needs, typically processing between 37 million and 42 million barrels of crude oil and feedstock per year. Around half of the oil comes from the Middle East, with the rest being shipped in from around the Asia Pacific.
Under the expansion plan, the company expects to increase capacity by 8%, or an additional 8,200 barrels a day, and will increase it's market share in the New Zealand fuel supply chain --excluding fuel oil and bitumen-- to 80% from 72%.
New Zealand Refining said in a shareholder presentation the project would see earnings before interest, tax, depreciation and amortization top NZ$60 million annually once it is completed.
BP Managing Director Mike McGuinness said that the company, which owns 23.66% of New Zealand Refining, had taken a long-term view to support the development, as it added value and was of national interest.
Exxon Mobil has a 19.2% stake in New Zealand Refinery, while Chevron holds 12.7%. Z Energy, which is a joint venture between Infratil Ltd. (IFT.NZ) and New Zealand government's Super Fund, owns a 14.1% stake.
-By Lucy Craymer, Dow Jones Newswires; 64-4-471-5990; firstname.lastname@example.org