Shell's wells yield $162 million profit
Maui and Kapuni gas fields contributeJAMES WEIR
Oil and gas giant Shell made a profit of $162 million from its fields in Taranaki last year, including the huge but ageing Maui and Kapuni gas fields.
Shell sold its retail petrol stations in New Zealand in 2010.
But Shell maintains its large and profitable oil and gas production fields in Taranaki and is a partner in a joint venture to explore for more in the Great South Basin off the bottom of the South Island.
It is possible partners in the Great South Basin could drill an exploration well in the summer of 2014-15, but they are still analysing data from seismic testing.
Shell and its partners are also trying to extend the field life of the long-running offshore Maui field and the onshore Kapuni gas field in South Taranaki, with plans to “frack” a couple of planned Kapuni wells in the coming year.
Fracking is a controversial drilling process that involves pumping chemicals into wells to force gas or oil out.
Opponents say it can contaminate groundwater, with a small group of 40 protesters at the Kapuni site a week ago. Shell argues fracking is safe.
Shell Investment NZ's annual results for calendar 2011 showed after tax profits were down about $20m to $162m for the year.
Shell refused to say how much it paid in royalties to the government, but it paid $64m in tax in the past year. Shell paid a $100m dividend to its parent company for the year, down from $247m in the previous year.
Total revenues were up, to $1.33 billion, from $1.28b in the previous year as a result of world-wide oil and condensate price increases.
The slightly higher revenues were undone by various higher costs.
Shell is the dominant partner in the 33-year old Maui gas field which produces about 20 per cent of the country's gas.
Maui is owned by Shell with 83.75 per cent, Austrian company OMV with 10 per cent, and Todd Energy with 6.25 per cent. The partners are now trying to maximise reserves and extend the field life, with a new drilling programme to target gas bypassed earlier.
The "AD ihi" prospect will be redrilled from the Maui A platform and up to seven existing wells will be sidetracked in coming months.
Drilling continues from the existing wells on the Maui B platform where up to seven wells are being sidetracked, to get more gas.
Most recent Crown Minerals figures show Maui originally had the equivalent of about 157 million barrels of oil, although remaining reserves were down to just a few million barrels.
Shell is also a 48 per cent partner in the valuable Pohokura gas field off Taranaki. Last month it was reported that a big drilling rig has yet to start a $40 million drilling campaign aimed at extending the life of Kapuni, the country's oldest gasfield, even though it arrived in New Zealand about six months ago.
The project will involve a work- over of an existing well in the Kapuni field and the drilling of two new wells from an existing well site.
STOS has consent for fracking for two new wells at Kapuni.
STOS general manager and chairman for Shell in New Zealand, Rob Jager, has said: "We think [fracking] can work; it can certainly be done safely. If it works it's possible to anticipate . . . more wells at Kapuni."
In May, Shell NZ took control of a joint venture exploration in the Great South Basin, saying there are good indications of natural gas after $100m of exploration in the "frontier" area.
- © Fairfax NZ News
What do you think of the proposed alcohol policy?Related story: Push to close bars at 2am