Plan for equality on Shell merger
Jane Harper: Herald Sun: November 8, 2015
A PEAK manufacturing group has urged the competition watchdog to place conditions on Royal Dutch Shell’s multibillion-dollar buyout of oil and gas heavyweight BG Group.
The proposed $US70 billion ($99 billion) deal would be one of the biggest in the oil and gas sector’s history.
The Australian Competition and Consumer Commission is due to announce its decision on November 19, but has raised concerns about the potential impact on gas supply.
Manufacturing Australia has made fresh calls for the ACCC to lay down parameters to ensure gas is made available to domestic and international customers in a “transparent and equal” manner.
Manufacturing Australia said it feared the merger would undermine efforts to reform what it said was presently a dysfunctional gas market.
“There are options that the ACCC can, and should, consider,” chairman Mark Chellew said. “Whatever the mechanism, the ACCC’s objective should be to make sure Shell’s Arrow joint venture gas is developed, and that it is made available to all potential customers on an equal footing.
“If the Arrow joint venture gas is locked away — or diverted straight to export without the domestic market even having an opportunity to bid for it — then all efforts to improve the competitiveness and transparency of the east coast gas market will be significantly undermined.”
Manufacturing Australia said it first raised concerns about the east coast gas market in 2011.
“The market is operating ineffectively, with insufficient competitive rivalry between domestic players,” Mr Chellew said. “If the Shell BG acquisition does go ahead, it is vital the ACCC considers enforceable undertakings to ensure the domestic market is not shut out of the opportunity to bid for the Arrow gas.”
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