London Evening Standard: Shell reveals new fall in reserves: “OIL AND gas reserves have fallen by a further billion barrels at Anglo-Dutch giant Shell…”: “Shell today published a mammoth 264-page document filed with US regulators which confirms what analysts feared - the group replaced only 19% of its production last year with new fields.” (ShellNews.net) 31 March 05

Steve Hawkes

31 March 2005

OIL AND gas reserves have fallen by a further billion barrels at Anglo-Dutch giant Shell - but this cut has nothing to do with re-stating contentious discoveries found by the previous management.

Shell today published a mammoth 264-page document filed with US regulators which confirms what analysts feared - the group replaced only 19% of its production last year with new fields.

This means that after taking 1.3bn barrels of oil and gas out of the ground in 2004, Shell's proven reserve base now stands at the equivalent of 11.9bn barrels, compared with 12.9bn at the end of 2003.

Shell was thrown into crisis by the reserves scandal, sparked a year ago when former chief executive Sir Philip Watts admitted the group had overstated just how much proven oil and gas it had under the ground.

More than five billion barrels of oil and gas were recategorised as unproven, leaving Shell way behind its fierce rivals Exxon and BP. Reserves banks are the lifeblood of energy firms, and theirs are closer to 18bn barrels.

In the form filed with the US Securities and Exchange Commission, Shell admits the current low rate at which it is bringing new discoveries on stream to replace production 'is clearly a concern'.

In an oft-repeated dig at the former board, the group adds: 'It reflects the exploration strategy in the late 1990s and the group's relatively low investment in the post-1998 period. Exploration has since been refocused and investment levels have increased.'

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