The Australian Competition and Consumer Commission will not intervene in the Santos acquisition of Parker & Parsley Australasia Pty Ltd.
Announcing the decision today, ACCC Chairman, Professor Allan Fels, said that in March 1996, Santos Limited acquired certain oil and gas interests from Parker & Parsley Australasia Pty Ltd.
"The acquisition raises the level of concentration in natural gas production and marketing in the South Australian Cooper Basin and the Surat Basin in central and eastern Australia. Before the acquisition, Santos held the majority interest in the South Australian Cooper Basin Unit and significant interests in key gas production projects in Queensland.
"The ACCC was concerned the acquisition may be likely to result in substantial lessening in competition after the acquisition by Santos of a further independent gas producer in the South Australian Cooper Basin.
It remains concerned that the further concentration at the gas production and marketing levels may hinder the potential benefits from a competitive gas market envisaged from the implementation of reform processes in the Australian gas industry pursuant to the Hilmer reforms," he said.
"The ACCC conducted an extensive inquiry into the acquisition which included interviews with key industry participants and gas experts. The ACCC rarely has sufficient information itself with which to assess matters under the mergers test and for this reason relies to a significant extent on evidence and information provided by concerned parties.
"During the course of the inquiry, concerns were raised by a number of industry participants concerning the increase in concentration resulting from the Santos acquisition. But, to date, the ACCC has not been able to obtain sufficient evidence on which to take the matter further.
"While the ACCC still retains concerns regarding competition in gas markets in central and eastern Australia, it has decided not to pursue the acquisition."
Announcing the decision today, ACCC Chairman, Professor Allan Fels, said that in March 1996, Santos Limited acquired certain oil and gas interests from Parker & Parsley Australasia Pty Ltd.
"The acquisition raises the level of concentration in natural gas production and marketing in the South Australian Cooper Basin and the Surat Basin in central and eastern Australia. Before the acquisition, Santos held the majority interest in the South Australian Cooper Basin Unit and significant interests in key gas production projects in Queensland.
"The ACCC was concerned the acquisition may be likely to result in substantial lessening in competition after the acquisition by Santos of a further independent gas producer in the South Australian Cooper Basin.
It remains concerned that the further concentration at the gas production and marketing levels may hinder the potential benefits from a competitive gas market envisaged from the implementation of reform processes in the Australian gas industry pursuant to the Hilmer reforms," he said.
"The ACCC conducted an extensive inquiry into the acquisition which included interviews with key industry participants and gas experts. The ACCC rarely has sufficient information itself with which to assess matters under the mergers test and for this reason relies to a significant extent on evidence and information provided by concerned parties.
"During the course of the inquiry, concerns were raised by a number of industry participants concerning the increase in concentration resulting from the Santos acquisition. But, to date, the ACCC has not been able to obtain sufficient evidence on which to take the matter further.
"While the ACCC still retains concerns regarding competition in gas markets in central and eastern Australia, it has decided not to pursue the acquisition."