The move is part of a change from 'area of interest' accounting to 'successful efforts' accounting, where exploration is written off immediately unless a discovery is made.

The change brings Shell Australia into line with international accounting standards and follows Woodside, which is 34% Shell-owned, which made a similar change earlier on in the year, resulting in a $715 million write-down.

Shell reported a 1.8% fall in after-tax earnings to $890 million in calendar 2002. A year earlier the result was $906 million.

Shell said its net income before interest and taxes for oil refining and marketing was $373 million, compared with a loss of $80 million in 2001.

But in its oil and gas exploration and production business, the upstream sector, net income before interest and taxes fell 53.7% to $663 million, from $1.43 billion.

The company is now waiting for government approval of the Barrow Island development of the Gorgon project.