And unless there were further changes to New Zealand's fiscal and regulatory regimes, that position would continue, with few projects passing Shell International's stringent global screening and ranking system.

The 1tcf-plus Pohokura project, in shallow water and very close to the Methanex plants and existing infrastructure, represented the jewel in Shell New Zealand's crown.

However, this country was not expected to yield the giant discoveries on which the majors depended to "recharge" their reserves inventories. Shell only expected further small to medium- sized discoveries to be made in New Zealand - projects which would probably not attract funding.

Jeans said the government needed to make further fiscal and regulatory changes to remain a favoured country for exploration investment. He suggested explorers being allowed longer times to reach "drill or drop" decisions under the acceptable frontier offer system; that Crown Minerals accept 3D seismic in place of well commitments; and that there be fiscal relief for deepwater and frontier regions.

Large blocks, with longer exploration timetables, were needed for deepwater and frontier basins.

The Bonga and Bonga South deepwater block off Nigeria were estimated to contain about 1.4 billion boe, the same ultimate recoverable reserves estimated for all New Zealand.

However, Shell Petroleum Mining and Shell Todd Oil Services had done extremely well in recent years and were among the best in the Shell world for volume and funding efficiency.

The few New Zealand ventures Shell was interested in were the deepwater Haast basin, which fell into the greenfield/new frontier category; the Pohokura project, which was mature/new hub venture; and the Kaheru and Kapuni prospects/fields.

By Neil Ritchie.