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Daily Telegraph: Shell eyes acquisitions to give reserves a lift

By Melanie Feisst (Filed: 27/01/2006)
Shell chief executive Jeroen van der Veer said yesterday the company would consider making acquisitions of up to $10billion (£5.6billion) to increase reserves.
“Even in times of high oil prices it's possible, but not sure, that you may do small acquisitions or swaps of up to $10billion,” he said at the World Economic Forum in Davos, as the price of Brent crude veered around $65.
He said it was difficult to see where larger acquisitions could create value for Shell's shareholders.
Mr van der Veer also hinted that the group's spending may become more geared towards unconventional ways of gathering oil, such as drilling for oil in ever-deeper water and analysing deposits of gas left in reservoirs following conventional drilling.
He would not comment on possible group targets, but the most likely avenue is believed to be swaps or oil fields, as few oil companies are now worth less than $10billion. Shell is due to publish its full-year results on February 2.
Yesterday, Spain's largest oil company, Repsol, slashed its oil and gas reserves by 25pc, signalling trouble with it development prospects, primarily for natural gas in Bolivia and Argentina.
The majority of the revisions are in Bolivia, accounting for 52pc, and Argentina, 41pc, Repsol said in a filing to the Spanish regulator.
As a result of the downgrade, Repsol's reserves will fall to 3.672 billion barrels of oil equivalent from 4.926 billion barrels.
Repsol shares were suspended ahead of the announcement. They last traded at €24.78 (US$30.33).

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