Shell reserves show shift from oil to gas
Mon Apr 2, 2007 11:51AM BST
Reuters
http://uk.reuters.com/article/stocksNews/idUKNOA23899520070402
By Tom Bergin
LONDON (Reuters) - Royal Dutch Shell pumped twice as much oil as it
found last year, forcing the company to rely on traditionally
lower-margin natural gas and oil sands to boost its reserves.
Figures issued on Monday echoed a trend across the industry as resource
holders increasingly shun the oil majors.
A spokesman said on Monday that Shell's reserve replacement ratio (RRR)
-- the extent to which reserves additions matched output -- was a
healthy 158 percent, well ahead of the 100 percent level oil companies
usually target.
However, Shell's 20-F U.S. regulatory filing showed natural gas
accounted for over 60 percent of the total, or 1.3 billion barrels of
oil equivalent (boe), compared to a crude-biased oil and gas production
total of 1.3 billion barrels.
Additions of reserves of crude oil and non-gas liquids accounted for
only 367 million barrels, compared to daily crude production of over 2
million barrels per day.
Shell added more reserves from its growing oil sands operation in Canada
than of conventional crude.
Shell's experience echoes that of Exxon Mobil Corp, which has relied
heavily on its natural gas projects in Qatar and elsewhere for its
reserves additions in the past two years.
Many other oil companies have failed to match their production with new
reserves additions in recent years even including gas finds.
The difficulty in adding new crude reserves reflects a growing desire on
the part of resource-holding nations to keep crude production in the
hands of state-controlled oil companies.
The Western oil majors' technical expertise in production and export of
natural gas -- a more complicated process -- means they are still sought
as partners.
However, analysts fear countries like Russia may only invite foreign
companies into gas projects until domestic, state-controlled companies
have mastered techniques such as liquefying natural gas for export by ship.
