Deep-water problems delay Bonga operation.

Byline: By Guy Anderson 

Bonga - the giant oil and gas vessel completed on Tyneside - will not start pumping oil until the end of the year, six months later than expected, Shell said yesterday.

The ship was expected to start pumping up to 225,000 barrels of oil a day by June, having left Amec's Wallsend yard in October.

Energy giant Shell despatched the Floating Production Storage Offloading vessel, the largest ever to sail into the Tyne, to oil fields in Nigeria after the 10-month refit project.

But difficulties of working in deep water have been blamed for delaying the first barrel until the end of the year.

Walter Van de Vijer, Shell's upstream chief, said: "It is later than we had hoped for. The delays stem from the complexity of executing efficient work in the deep water."

He said the pounds 1.7bn Bonga was now in position off the coast of Nigeria, having sailed 4,766 nautical miles from Tyneside. It is expected to push Nigeria's output to 2.3m barrels a day when it starts pumping oil from up to 1,000 metres below the water surface.

News of the delay comes after the Anglo-Dutch energy giant downgraded its estimate of oil reserves by 20pc last month - equivalent to 3.9bn barrels.

Shell chairman Sir Philip Watts yesterday announced the company's best ever annual figures; a 27pc rise in pre-tax profits to pounds 6.38bn for 2003.But he said the outlook for the year ahead remained uncertain: "We continue to operate in a volatile industry, where short term performance is impacted significantly by supply demand imbalances and commodity prices movements."

Amec clinched the pounds 300m contract to build part of the Bonga on behalf of Shell at the start of 2001. More than 2,500 staff at the yard worked on the ship, building the crucial "top sides", equipment which allows oil and gas to be processed from the seabed into the vessel.

The 300,000 tonne ship is anchored 120km off the coast of the Niger Delta where it will remain for 20 years.