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Shell Won't Speculate on Reserve Cuts

March 22, 2004|From Bloomberg News

Royal Dutch/Shell Group, Europe's second-largest oil company, declined to rule out more cuts in its oil reserves after downgrading them for a second time in two months.

"It would be imprudent to give any definitive outlook for the future," Vice Chairman Malcolm Brinded said in a statement.

The company was responding to a report in the Observer newspaper in London, citing an unidentified industry expert, that Shell executives are concerned that more oil-reserve downgrades may be needed. A review of London- and the Hague-based Shell's reserves by consultant Ryder Scott Co. is 40% complete, the paper said.

Shell last week cut its proven reserves in 2002 by 250 million barrels of oil, on top of the 3.9-billion-barrel reduction announced Jan. 9. An assessment of 2003 reserves given on Feb. 5 was overstated by 220 million barrels, the company said last week.

"I would not expect something of this magnitude for the remainder of the exercise," Brinded said.

The reduction in reserves delayed publication of Shell's 2003 annual report and compounds concern about growth in exploration and production. The Securities and Exchange Commission is investigating the cuts.

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