New Zealand: Z Energy to dominate fuel market after Chevron NZ acquisition

New Zealand gas station owner Z Energy will control 100 per cent of Chevron’s downstream services in the country through the acquisition of Chevron New Zealand in a deal worth NZ$785 million ($734 million).

The deal gives Z Energy control over all the downstream operations, including Chevron-owned service stations and lubricant interest. The Kiwi petroleum retailing company will be in control of nearly half of New Zeland’s market for petrol, diesel and jet fuel.

With this acquisition, still subject to clearance under the Commerce Act 1986 and the consent of the Overseas Investment Office (OIO), Z Energy attains 146 Caltex service stations, 73 truck fuelling stations, a 2 million-barrel inventory and 10 terminal assets; in addition to the existing 210 Z gas stations, according to Zacks.

Z Energy Chief Executive, Mike Bennetts, described the deal as a great opportunity for the company’s development and the New Zealand market.

“The New Zealand transport fuels market is and will remain highly competitive,” he said. “As New Zealanders know, Z and Caltex are only two players in a very dynamic marketplace in which there are currently five importers of refined fuel and crude oil and where motorists have the choice of at least a dozen fuel retailers.”

The news about the agreement reached between Z Energy and Chevron was first published on Monday after the information was leaked. "It is really disappointing. So many people worked on confidentiality and we wanted to make sure all stakeholders and shareholders were well treated and I don't (think) they were by these leaks,” said Bennetts in a press release.

Some competitors have already warned against the power and influence Z Energy will have after the acquisition. By controlling 49 per cent of the transport fuel market, Z could influence the industry’s prices, reports Financial Review.

Z Energy was founded in 2010, rebranding the Shell operations in New Zealand after the Dutch giant sold their existing assets to Infratil and NZ Super - who currently hold 40 per cent of the Kiwi oil retailing company.