The billion barrel oilfield was expected to start producing in the summer but Peter Voser, Shell’s finance director, said that production would not get going until the fourth quarter. Bonga’s budget has already swelled from a $2.7 billion estimate in 2001 to about $4 billion (£2.3 billion).

The extra delay adds to the escalating cost pressures at Shell which include a doubling of costs at Sakhalin LNG, the Siberian gas project that is now budgeted at $20 billion. Jeroen van der Veer, Shell’s chief executive, promised better cost control as he revealed second-quarter profits of $4.6 billion, which were up 26 per cent from the previous year but below City expectations.

In a reference to the Sakhalin cost overruns, admitted by Shell a fortnight ago, Mr van der Veer said: “It is clear we must improve project management. The successful delivery of this mega-project is my absolute priority.” Negotiations with Gazprom over the valuation of its proposed investment in Sakhalin would take a further two months, the Shell chief said.

Under pressure to find new oil after last year’s reserves scandal, Shell is increasing its exploration budget from $1.5 billion to $1.8 billion. Shell announced two discoveries in Nigeria yesterday and Mr van der Veer said the company had drilled 21 successful wells, a 62 per cent success rate, but he declined to give reserve figures.

Overall, capital spending this year is set at $15 billion but cost pressures and delays will push expenditure even higher in 2006. City analysts expressed concern yesterday about Shell’s soaring costs and escalating upstream budgets. One banker said the problem had its roots in the late 1990s when Sir Mark Moody- Stuart slashed spending. “They are rebuilding their cost base and increasing capital expenditure just at the wrong time,” he said.

Cost problems at Bonga emerged last year when Shell was forced to tow the floating production and storage offshore (FPSO) vessel from Tyneside to Nigeria before it was finished to avoid winter weather. First oil production was originally expected last year but industry analysts now expect that full production of more than 200,000 barrels per day will not be achieved before 2006.

Shell produced more oil and gas than expected in the second quarter, achieving a 2 per cent output increase. Profits were marred by disappointing results in its Gas & Power unit.

Shell’s problems were contrasted with its Texan rival ExxonMobil yesterday. The company announced a 32 per cent profit increase. Lee Raymond, the oil group’s chairman, boasted: “ExxonMobil-operated projects that are key to future volume growth, continue to be on budget and are on, or ahead of, schedule.”

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