Woodside Petroleum's proposed $US3.75 billion acquisition of a portfolio of Apache assets cleared a key hurdle this morning when it won approval from Australia's competition regulator.
The Australian Competition and Consumer Commission said it would not oppose the deal, which Woodside and Apache had hoped to complete by the end if this month.
ACCC approval had been expected.
Under the deal, Woodside will acquire Apache's stake in the Wheatstone (near Onslow) and Kitimat (in Canada) LNG projects and the Balnaves oil operation in the Carnarvon Basin.
The Wheatstone project includes a proposed domestic gas development, which would enhance Woodside's position as the State's biggest supplier of the fuel.
"Following the proposed acquisition, Woodside would continue to face strong competition from other (domestic gas) 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.