The Australian Competition and Consumer Commission has announced that it will not oppose Woodside’s (ASX: WPL) proposed acquisition of Apache Corporation’s interests in the Wheatstone, Balnaves and Kitimat Projects. The Wheatstone and Balnaves Projects are located in the Northern Carnarvon Basin, offshore WA, while the Kitimat Project is located in British Columbia, Canada.
In Australia, Woodside and Apache overlap in the wholesale supply of natural gas to the domestic market in WA.
“Following the proposed acquisition, Woodside would continue to face strong competition from other suppliers in the market, including Apache, Chevron, and Santos,” ACCC Chairman Rod Sims said.
“Apache will continue to supply gas to the market through its interests in the Macedon, Varanus Island, and Devil Creek Projects. As a result, Apache will remain a larger supplier of domestic gas in WA 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 acquisition will 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.”
While the ACCC determined that, in this instance, the proposed acquisition would be unlikely to raise significant competition concerns, the ACCC noted concerns expressed by the market about the effects of any further industry consolidation.
“The ACCC will continue to monitor the supply of domestic gas in WA and any future acquisitions in this area will be scrutinised carefully,” Mr Sims said.
The Balnaves and Kitimat Projects are not expected to supply product to Australia.
Woodside is an oil and gas company listed on the Australian Securities Exchange. Its interests in oil and gas exploration and production in and around WA include being the operator of the North West Shelf and Pluto LNG Projects as well as developing the Browse Floating LNG Project.
Apache is an oil and gas company registered in the United States. Apache holds interests in oil and gas interests in and around WA in the Macedon, Varanus Island and Devil Creek Projects.
See also: Public register
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