Royal Dutch Shell Group .com Rotating Header Image

Shell’s $390m asset write-off casts doubt on CSG reserves

: Resources reporter: Melbourne: 2 MAY 2017

Shell has written off $390 million worth of newly acquired coal-seam and other gas exploration and evaluation ground associated with the Queensland Curtis LNG plant at Gladstone because of poor drilling and testing results.

Raising more questions over long-term production from Queensland coal-seam gas fields that are supposed to feed Gladstone’s three gas-hungry LNG plants for the next 20 years, the writedowns were revealed as part of $1.2 billion of impairments logged this month in local accounts for Shell’s Queensland subsidiaries.

Most of the $1.2bn of writedowns were associated with valuations of Shell’s $90bn takeover in 2016 of BG Group, the previous owner of the Queensland Curtis LNG plant. But an assessment of BG’s Australian onshore gas ground worsened the writedowns.

“During the year, the group also wrote off all its exploration and evaluation assets, amounting to $390m, as technical feasibility and commercial viability of extracting oil and gas resources were not demonstrable,” Shell said.

The three big LNG plants built at Gladstone in recent years at a cost of $80bn are in the national spotlight as they have rapidly tripled east coast gas demand and sent prices soaring.

Shell’s Queensland gas production and exploration subsidiary logged a $1.825bn loss for 2016 (including $443m of finance costs), compared with a $432m loss in 2015. Its LNG plant subsidiary declared a $695m net profit (after $14m of finance costs), up from $72m in 2015.

Shell said its Queensland upstream employee numbers had dropped by 342 to 956 in the wake of the BG takeover, thought to be mainly in corporate jobs and in line with numbers flagged.

FULL ARTICLE

This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Comments are closed.