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Reuters: Shell flags lower oil reserve additions in 2007

Thu Jan 31, 2008 9:37am GMT
By Tom Bergin

LONDON (Reuters) – Royal Dutch Shell added “at least 1 billion barrels” of new oil and gas resources in 2007, Chief Executive Jeroen van der Veer said on Thursday, around half the level the oil giant flagged last year.

Van der Veer told reporters on a conference call that Shell made 11 material discoveries in 2007 and had an exploration success rate of 40 percent, yielding an extra 1 billion barrels of oil equivalent of resources.

A year ago Shell said it added “over 2 billion barrels oil equivalent of new conventional resources” in 2006.

Chief Financial Officer Peter Voser said both figures largely related to oil and gas added through exploration.

Voser noted that the latest figure excluded “business development” activities, which were included in the 2006 figure, so the actual performance in 2007 may not fall so short of the 2006 result.

“We are very satisfied,” he told reporters on the call.

Resources, also known as unproven reserves, refer to rough estimates of recoverable barrels. Analysts and investors generally focus on “proven” or “proved” reserves, which are independently verified estimates, that meet regulators’ rules, of recoverable barrels.

Shell shares fell earlier this week on fears it performed badly at adding new proven reserves in 2007.

(Reporting by Tom Bergin, Editing by Greg Mahlich)

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