Shell: New Zealand E&P Activity Hit All-Time High in 2005

New Zealand Crown Minerals

Shell New Zealand's activity levels in its exploration and production business was at its highest level ever in 2005, the company said.

New Zealand chairman Dr Ajit Bansal said in a media release that total capital investment in the E&P business in 2005 was $186 million, the majority of which related to development work on the Pohokura offshore gas-condensate field.

Pohokura's first commissioned gas and condensate, from wells drilled from onshore, was produced in mid-August, 2006.

Shell was focused on maximizing the recovery of resources from its major assets Pohokura, Maui, and Kapuni.

Dr Bansal said that Shell's technological performance was a highlight in 2005, with its E&P business applying world-leading technology to local oil and gas development and exploration activities.

Shell reported that the E&P business generated a profit of $141 million in 2005, compared to $164 million in 2004.

The 2005 profit was generated on revenue of $753 million, which is slightly higher than $740 million the previous year.

Dr Bansal said the increase in revenue was due to higher realized oil and gas prices, but profit was down due to increased depletion charges and an increase in the trading product costs.

"In addition to the operating transactions, corporate items such as foreign exchange differences and interest receipts provided a net benefit to the bottom line."

In line with Shell's international financial reporting policies, Shell New Zealand companies adopted the International Financial Reporting Standards for 2005.