Shell New Zealand earlier this week released its second "Business Review and Sustainability Report" and in it are some chilling words for this country.
In the report country chairman Lloyd Taylor says that 2001 was a critical year for the Maui gas field, with record high production rates over the cold, dry winter potentially averting a nationwide power crisis.
Maui provided 50% of this country's electricity generation needs to avoid generation shortfalls and associated "brown outs" in some cities. Maui gas production was consistently 115% above normal rates throughout the crisis period.
"However, such consistent deliverability is now unachievable," Dr Taylor warns.
So, New Zealand faces possible widespread power shortages during any further cold, dry winters until the large, 1tcf-plus, Pohokura gas field is brought onstream in late 2005-early 2006. This will, to some degree, overlap the decline in Maui offtake rates.
Taylor told EnergyReview.Net there was nothing unusual in the future inability of Maui to help prevent energy crises.
"This is simply a consequence of field decline, as pressures in reservoirs decrease and edge water hits outer wells. So, the available gas deliverability falls off and will continue to do so until 2009.
"The field has simply come off its production plateau, as all fields eventually do."
However, Taylor said this again highlighted the essential role of gas to New Zealand's security of energy supply; the urgent requirement to bring Pohokura onstream; and the urgency of exploring for new gas to underpin the long-term security of gas supply as New Zealand entered its "new energy era", that is, post-Maui.
He said there were no grounds for complacency, with Maui expected to run out 2.3 years earlier, at current contracted offtake rates, than the originally expected mid-2009.
Last November field owner Maui Development Ltd announced it expected total developed and readily-accessed undeveloped reserves were likely to be about 3800PJ, not the contracted 4085PJ.
Taylor said booked reserves had previously been in excess of contracted quantities, giving a total write-down of remaining reserves of 404PJ.
Earlier this week Shell NZ reported a total group profit of $NZ200.48 million for the 2001 year, with its acquisition of Fletcher Challenge Energy accounting for a significant part of that result.
Shell's exploration and production (EP) business contributed $NZ172.35 million, well up on the 2000 result of $NZ113.8 million, to total group profit; while the combined retail and commercial oil products (OP) business profit plunged to a net profit of $31.16 million in 2001, some 50% less than that of 2000 ($62.4 million).
