If, as I imagine, Shell keeps a similar number of contractors off the books to keep the head-count down, the profit per head is about £70k. If you earned £70k as profit in a business, you probably wouldn't expect to be sand-bagged with a windfall tax by a starving Chancellor.

" />
Building a world of
resilient communities.

MAIN LIST

 

ODAC Guest Commentary - Shell 2007 profits

GUEST COMMENTARY

Shell's 108,000 employees earned "an obscene" £14 billion in profits last year.

If, as I imagine, Shell keeps a similar number of contractors off the books to keep the head-count down, the profit per head is about £70k. If you earned £70k as profit in a business, you probably wouldn't expect to be sand-bagged with a windfall tax by a starving Chancellor. There is also some truth to Shell's defences, "We can't invest profits if we can't keep them", and "We don't profit from petrol, it's tax which is hammering consumers." And nobody gave Shell a handout when the oil price fell below $10.

What is more interesting about Shell's results is this: they didn't publish their reserves. Memorably, they've been known to publish the wrong numbers, but none at all? The most Shell have revealed is that in 2007 they discovered 1 billion barrels of new "resources", including 11 "material discoveries". A field of well under 100 million barrels of "resource" is now material? How have the mighty fallen!

A billion barrels of "resources" means very little. It is not a reserve, it could indicate something or nothing. It's a quantity of petroleum which might or might not be recoverable. Usually less than half of any oil field is actually produceable.

How does this stack up? In 2006 Shell added 2 billion barrels of oil equivalent (i.e. oil + gas) to their "resources". During 2007 they produced almost 1.2 billion barrels of oil and gas. However you look at it, Shell did far worse than in 2006, they have not replaced last year's production, and they are not revealing the actual reserve data.

This is ugly if one of the best explorers just can't find any more conventional oil. And Jeroen Van der Veer, Shell's boss, commented only last week that the world looked set to reach peak oil by 2015. This is not so much joined-up thinking as joined-up consequences.

And don't expect anything better from the other majors - they're all in the same boat. There is nowhere left to look. There are few spots left in the world where a billion barrel field could be hiding. Those few spots are increasingly closed to foreigners as a predictable wave of resource nationalisation sweeps through the industry. Shell not only failed to find much in 2007, Putin even forced them to sell back what they'd already found in Sakhalin-2.

But Shell can't postpone the evil reporting day forever. Eventually it will have to make its annual statement to the American authorities, which must include reserves data. That could make woeful reading.

Richard Miller, BP

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.

 

This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.

Tags:  

Peak Oil Review: A Midweek Update 11th Feb

A midweek update. Oil prices continued to fall this week with New York …

Renewables: The Next Fracking?

As a general rule, in fact, the less direct experience a given person has …

IEA in Davos 2016 Warns of Higher Oil Prices in a Few Years’ Time

This recent forum was about how to transition away from fossil fuels, after …

Why the Wild Descent of Oil Is Cause for Concern

The signs of oil's madcap price collapse are everywhere.

It's not Rocket Surgery: Choosing an Indoor Mini Wood stove for a Tiny House

This article will focus on one item which can keep you comfortable in cold …

Peak Oil Review - Feb 8

 A weekly roundup of peak oil news, including: -Oil and the global …

California Offshore Oil Fracking Permits Halted While Federal Government Performs Environmental Review

The U.S. federal government will stop approving offshore oil fracking …