Shell Relied on Qatar Gas Project to Boost Reserves Last Year

Royal Dutch Shell Plc, Europe’s largest oil company, relied on the advancement of its gas-to- liquids project in Qatar for more than half of the gain in its proven reserves last year, the company’s annual report showed.

Shell, based in The Hague, had proven oil and gas reserves equal to 11.807 billion barrels of oil at the end of 2006, including its share of equity-owned investments, up from 11.466 billion barrels at the end of 2005, according to the report, filed with regulators today.

The 2006 tally remains below Shell’s year-end 2004 reserves.
Shell’s report also showed that the cost of production rose last year in all regions where it operates, and rose for a second year in most locations. In the U.S., production costs rose to $8.08 a barrel.

In its fourth-quarter earnings results on Feb. 1, Shell said it replaced 150 percent of its proven reserves through exploration last year, up from 78 percent in 2005, using U.S. Securities and Exchange Commission accounting standards and including oil sands. The 2005 ratio, excluding oil sands, was about 67 percent.

Bloomberg