ChinaView.cn: G7 calls for oil information: "Transparency and data is key to the smooth operation of markets," G7 finance ministers said in a statement after two days of talks ended on Saturday.”: “Earlier this week, Shell reduced its estimate of 2003 reserves by 9.8 per cent and said its holdings may not rise until next year. Because of the lost reserves, first disclosed in January 2004, Shell paid US$151.5 million in US and British fines and dismissed three executives.” (ShellNews.net) 7 Feb 05
www.chinaview.cn 2005-02-07 08:28:43
BEIJING, Feb. 7 -- The Group of Seven industrialized nations called on oil-producing nations and companies to lift the veil of secrecy surrounding output and reserves, aiming to keep a lid on prices and open new sources of supply.
"Transparency and data is key to the smooth operation of markets," G7 finance ministers said in a statement after two days of talks ended on Saturday. The ministers said their aim was to ensure "energy security" and "a climate conducive to investment" in the industry.
The measures are designed to give traders better information on supply, replacing the estimates now made by consultants who track oil tankers because producing nations such as Saudi Arabia withhold the data. Threats to supply in Iraq, Russia and Nigeria sent New York crude to a record US$55.67 a barrel last year.
"We need more information about oil reserves," said British Chancellor of the Exchequer Gordon Brown, whose nation hosted the talks. "Transparency in the oil markets is now something that is necessary."
Brown said he wants industry groups and international financial institutions to draw up worldwide standards for accounting for reserves. He also wants producing nations to publish exact figures on supply.
The proposals would force companies such as BP Plc and the Royal Dutch/Shell Group, Europe's two biggest oil companies, to publish data about their reserves on an internationally agreed basis.
More art than science
For the oil industry, estimating reserves is more art than science. Companies hire consultants such as DeGolyer & MacNaughton and Ryder Scott Co to assess how much oil is in the ground based on how much wells are currently producing and the results of seismic surveys that map underground rock formations.
The plan would require the world's biggest oil-producing nations to provide more details on their national oil companies, budgets and government spending plans, said a British Treasury official.
"Western nations are not dealing with oil-producers as partners, why should they have the advantage of knowing details of oil-producers reserves?" said Ihsan Bu-Hulaiga, an economist and adviser to the government of Saudi Arabia.
Shell reserves
The International Energy Agency will coordinate discussions between companies and standard-setting bodies with expertise in measuring reserves.
Earlier this week, Shell reduced its estimate of 2003 reserves by 9.8 per cent and said its holdings may not rise until next year. Because of the lost reserves, first disclosed in January 2004, Shell paid US$151.5 million in US and British fines and dismissed three executives.
(Source: China Daily, by Gonzalo Vina and Reed V. Landberg)
http://news.xinhuanet.com/english/2005-02/07/content_2556766.htm