Building a world of
resilient communities.

MAIN LIST

 

Shell pumps twice as much as it finds

LONDON (Reuters) - Oil major Royal Dutch/Shell replaced less than half the oil it pumped last year with new finds, according to revised reserves figures published Thursday.

Shell said its proved reserves stood at 11.9 billion barrels of oil equivalent (boe) at the end of 2004, equal to less than nine years' production at average 2004 rates, excluding the Athabasca oil sands reserves, which it put at 0.6 billion boe.

While the figures were broadly in line with previous guidance, they will cement many investors' worries that Shell has lost its knack of finding oil, following a reserves over-booking scandal last year that led the company to downgrade around a quarter of its oil and gas reserves.

"The Reserve Replacement Ratio (RRR), excluding the impact of divestments and year-end pricing and including associates, was 49 percent," Shell said after it filed a report with the U.S. Securities & Exchange Commission (SEC). "Including the impact of divestments and year-end pricing, the RRR was 19 percent."

Shell, the world's third-largest oil group by market capitalization, added that it continued to target at least a 100 percent replacement of its oil reserves from 2004 to 2008.

Most of the large international oil firms are finding it increasingly hard to make new oil finds big enough to meet their goals to replace and increase production, threatening their long-term health.

The world's biggest reserves are controlled by Middle Eastern states, which restrict access to their reserves to their own national oil companies.

While Shell's 20-F filing shows its problems in finding oil are among the worst among its peers, many in the industry believe the SEC rules are too strict and underestimate the true state of firm's oil reserves.

Shell says the oil in the ground at its projects is many more times the 11.9 billion boe figure.

The company also cut its net income for 2004 to $18.2 billion from a previously reported $18.5 billion, to take into account its February reserves downgrade of 1.4 billion barrels of oil equivalent.

The filing also said Chief Executive Jeroen van der Veer received 2.9 million in salary and cash bonuses in 2004.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Make connections via our GROUPS page.
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.


Why Peak Oil Refuses to Die

Peak oil and climate change are two sides of the same coin. The coin itself …

Peak Oil Review - Sept 1

A weekly review including: Oil and the Global Economy, The Middle East & …

A Big Summer Story You Missed: Soaring Oil Debt

Last July the government agency, which has collected mundane statistics on …

Global Biofuels Status Update

Today I want to take a deep look at the global biofuels picture, drawing …

Peak oil notes - August 28

A mid-week update. Oil prices have been quiet this week trading around the …

Update on US natural gas, coal, nuclear, renewables

On August 6, I wrote a post called Making Sense of the US Oil Story, in …

The Peak Oil Crisis: When?

 The key question is just how many more months or years will production …