Western Oil Sands Inc. chopped 15 million barrels from the estimated reserves for its part of the Athabasca Oil Sands Project, while its partner Shell Canada Ltd. made no change at all.

Did reserves at Athabasca go down, or stay the same? The answer is: Yes.

That’s because Western is subject to Canada’s National Instrument 51-101 provisions for measuring reserves, while Shell is exempt — using instead what the industry considers the less conservative standards laid out by the U.S. Securities and Exchange Commission. So Western and Shell Canada can come up with different measurements for the same reserves, in part because they are using different yardsticks.

“We’ve got a percentage interest in the same asset,” says David Dyck, Western Oil Sands’ vice-president of finance and chief financial officer. “Any differentiation is a function of different rules we fall under, or differences in the evaluation of those reserves by different independent bodies.”

Shell, like many of the largest oil companies in Canada, has obtained an exemption from the parts of NI 51-101 that specify how reserves must be measured. (Other provisions, such as certifying reserves levels, still apply.) The exemptions allow big companies such as Shell to be more easily compared with similarly sized firms in the United States — but make it harder to compare with other Canadian firms.

Shell agrees that its partial exemption from NI 51-101 is the chief difference between it and Western, while stressing that it believes its estimates are an accurate reflection of the amount of bitumen that can be eventually mined. “We feel pretty confident about our understanding of the reserves,” says Shell Canada spokeswoman Jan Rowley, adding that the company believes that its reserves would not be materially different under NI 51-101.

Is Shell’s measurement less conservative than that of Western? The answer depends on the yardstick used.

If the chosen measure is revisions, Western wins on the conservative question. It reduced its estimate by 15 million barrels in the technical revisions category, a 5-per-cent decrease from what its reserves would have otherwise been at the end of the year. For Shell, an equivalent reduction would have topped 44 million barrels.

But Shell reserves estimates from the Athabasca joint venture did not change in 2003, other than from production of 17 million barrels, leaving the company with 883 million barrels of proven and probable reserves on a gross basis, before the deduction of royalties.

Drilling in a separate area called Sharkbite, where Shell holds sole ownership, prompted the company to add 118 million barrels to its reserves. While Shell did not reduce reserves for its oil sands holdings, it did do so for its Sable Island operations, where it slashed estimates by 41 per cent in January. And its parent company, Royal Dutch/Shell Group, has been under intense scrutiny this year as it has reduced its reserve estimates four times, by the equivalent of 4.47 billion barrels of oil.

Gross figures such as Shell’s cannot be directly compared with the net reserve that Western reported. But Shell says its net reserves are approximately 90 per cent of its gross number, or about 795 million barrels.

Western, with a stake one-third the size of Shell, should then have reserves one-third that size, or about 265 million barrels. As it turns out, the smaller partner reported reserves of 277 million barrels — indicating that Western has a slightly less conservative view of the same assets, even after its downward revision.