05/03/2015 - 09:38

ACCC clears Woodside's Apache deal

05/03/2015 - 09:38

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The consumer watchdog has given the green light to Woodside Petroleum’s proposed purchase of oil and gas assets from US energy company Apache, after concluding it would not have a significant effect on the domestic gas market.

ACCC clears Woodside's Apache deal
The Chevron-operated Wheatstone project.

The consumer watchdog has given the green light to Woodside Petroleum’s proposed purchase of oil and gas assets from US energy company Apache Corporation, after concluding it would not have a significant effect on the domestic gas market.

In a statement today, Australian Competition and Consumer Commission chairman Rod Sims said Woodside would continue to face strong competition from other suppliers, including Apache, Chevron and Santos, following the acquisition of interests in the Wheatstone, Balnaves and Kitimat projects.

He said the acquisition would not change the structure of the market in a material way, with Woodside’s share of the total market changing by less than 5 per cent.

“Apache will continue to supply gas to the market through its interests in the Macedon, Varanus Island and Devil Creek projects,” Mr Sims said.

“As a result, Apache will remain a larger supplier of domestic gas in Western Australia than Woodside following the proposed acquisition.

“Apache’s minority interest in domestic gas produced by the Wheatstone project will represent only a small fraction of the total gas to be supplied to WA, when it comes online in around 2018.”

The Wheatstone and Balnaves projects are located in the Carnarvon Basin, while the Kitimat project is located in British Columbia, Canada.

Woodside announced in December its purchase of Apache’s stakes in the three projects, with prompted a probe by the ACCC into how it would affect the price at which domestic gas is supplied.

Mr Sims said while the ACCC determined that in this instance the acquisition would be unlikely to raise significant competition concerns, it would continue to monitor the supply of domestic gas in WA and any future acquisitions would be scrutinised carefully.

The Balnaves and Kitimat projects are not expected to supply gas to Australia.

Woodside shares were 0.5 per cent higher at $35.30 per share at 9:30am.

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