Questions unanswered on Petrocorp sale

Press, 5 March 1988, Page 6

Questions unanswered on Petrocorp sale

By

PETER LUKE,

political reporter

J list who created the difficulties in the abortive sale! of Petrocorp to British |Gas remains to be answered. The Government has not .released the 35 pages of (warranties which it claims British Gas demanded, and which led to the ; deal being axed.

And British Gas has not commented since its chief negotiator returned home for! debriefing on Thursday. All a spokesman would say! yesterday was that the company had not decided how to handle its reaction.

But one experienced negotiator.. agreed on Thursday that the Government may have used the

warranties to terminate a deal it wanted to end all along. i Mr Geoff Datson said on "Eyewitness News" that the Government should not have been surprised at the issues British Gas was known to have raised.

He suggested that what the Government interpreted as an iron-clad position, might have been a negotiating stance, subject to compromise, j

Asked if this showed that the Government might have wanted to 1 end the deal all along, he said, “Well, I’m afraid that is how it looks to me.” The breakdown would not be good for New;Zealand’s reputation, said Mr Datson, a former deputy

secretary of the Trade and Industry: Department, and who was once trained to negotiate by British Gas.

I British Gas had spent a lot of money to come to New Zealand and make their case, (only to find they had wasted their time.

! The company has not commented !on the possibility of legal action, and wished Petrocorp well in its only comment on Tuesday evening; ! But the Prime Minister, Mr Lange, conceded this recourse was possible for the British !company, although he I appeared to doubt its success. ! The Minister of StateOwned Enterprises, Mr Prebble, has released legal advice saying that

“it would be a proper course of action,;albeit an abrupt one, if the Crown were to respond to British Gas by refusing to accede to its demands! and by accepting its stated position that it would withdraw.”

British Gas, according to Mr Prebble, had earlier said it would (withdraw from the deal, unless full warranties on thd business, assets, prospects and general condition j of Petrocorp were (given.

This demand! had exceeded the agreement in principle made on February 11. ! But this suggestion of an ultimatum was out of character for British 1 Gas, which was a clever and subtle negotiator, said Mr Datson, on Thursday.