Daily Telegraph (UK): Shell plays it safe over oil reserves: “Shell, the energy giant which is battling to restore its credibility after overstating its proven oil and gas reserves by a third, now has "the most conservative booking policy" of all its rivals, according to a leading industry analyst.”: “Last week Shell admitted that it had a reserve replacement rate of just 45pc to 55pc in 2004” (ShellNews.net) 7 Feb 05
By Christopher Hope, Business Correspondent (Filed: 07/02/2005)
Shell, the energy giant which is battling to restore its credibility after overstating its proven oil and gas reserves by a third, now has "the most conservative booking policy" of all its rivals, according to a leading industry analyst.
Wood Mackenzie also soothed fears that Shell was running out of oil and gas by forecasting that the company would be able to find more than enough hydrocarbons to replace its production between 2004 and 2008.
Last week Shell surprised the market with a fifth and final downgrade of its "proved" reserves, taking the total writedown over the past 12 months from 4.47billion to 5.9billion barrels of oil and gas.
Wood Mackenzie said the latest revision "does not change our view on Shell's current performance or future outlook. It does however raise questions as to the consistency with which the SEC [Securities & Exchange Commission] guidelines are understood and implemented and whether current reserve reporting is 'fit for purpose'."
The consultancy added: "Shell is now the only major company to have completed such a major reserve review and there is evidence to suggest that Shell now employs a much stricter definition of proved reserves than used by its peer group."
Last week Shell admitted that it had a reserve replacement rate of just 45pc to 55pc in 2004, but said it hoped to push this figure up to 100pc on average between 2004 and 2008.