Shell cuts oil reserve figures por second time

During the finalisation of the 2003 reserves data, concerns arose about the volume of the proved reserves booking proposed for the Ormen Lange field in Norway. As a result, the Group’s senior management engaged Ryder Scott Company as consultants in March to help conduct a fast-track review of selected fields covering approximately 40% of the global Shell portfolio, including some 60% of proved undeveloped reserves.

A number of issues have been identified to date, leading to the recategorisation of a further 250 million barrels of oil equivalent (‘boe’) as at the end of 2002. In addition Shell has reduced the volume of proved reserves it planned to book in 2003 by approximately 220 million boe of proved reserves (including volumes from Ormen Lange). The 220 million boe were included in the reserve replacement ratio (‘RRR’) disclosed on February 5th 2004; correcting for these volumes represents a reduction in the 2003 RRR of some 16 percentage points.

Approximately 95% of the volumes impacted by these reductions were previously booked as proved undeveloped reserves from non-producing fields. As a result, the expected impact on earnings is approximately $20 million. In addition well write-off costs related to the original recategorisation have been identified, amounting to $10 million after tax.

Shell is now validating these results by in-depth work on the specific fields as identified by the recent review, and also by examining the total portfolio, including those fields not part of the recent study. This work is expected to be complete by late April.

All reserves and financial figures included in this release should be regarded as preliminary. Final figures with respect to both reserves and financial impact may vary from preliminary results and will be disclosed as soon as appropriate.

Fuente: Financial Times