Houston Oil & Gas Journal: Royal Dutch/Shell trims its 2002 reserves again

Posted 26 May 04

By OGJ editors

HOUSTON, May 25 -- Royal Dutch/Shell Group has cut its proved oil and natural gas reserves estimate for the fourth time this year, and the company Monday reported a total reserves downgrade of 4.47 billion boe for 2002 reserves.

In April, the company had reported a total downgrade of 4.35 billion boe for 2002. In the latest news release issued from the London office, Shell said the 4.47 billion boe "relates to adjustments for royalties paid in cash on certain Canadian properties."

"With a reserve replacement ratio of 2003 of 63%, proved reserves were 14.35 billion boe at Dec. 31, 2003, or 10.2 years of production (all excluding oil sands)," Shell said.

The company intends to release its annual report on Friday as previously scheduled.

"The annual reports and accounts will reflect a restatement of reserves data and related financial impact, and we have implemented a number of accounting policy changes. We have also adopted a stricter application of some specific accounting standards," said Chairman Jeroen van der Veer.

In an April report prepared for its Group Audit Committee (GAC), Royal Dutch/Shell Group outlined how its former top executives knew and argued about a reserves reporting problem for 1 1/2 years before informing the public (OGJ Online, Apr. 20).