Energy
Shell Oil Reserves Unchanged at End of 2008
The Associated Press
03/17/09 - 05:37 AM EDT
AMSTERDAM -- Royal Dutch Shell(RDS.A), Europe's largest oil company, said Tuesday its oil reserves were unchanged at the end of 2008 from a year earlier.
The announcement means that 2008 was the first year the company hasn't pumped more oil than it has added to reserves since 2004, when an accounting scandal forced it to slash its proven reserves by more than a quarter.
The company said net reserves were 11.9 billion barrels of oil or equivalents at year-end, enough to last about 10 years if it stopped developing new projects.
CEO Jeroen van der Veer said Shell believes "the downturn could last more than a year" and Shell plans to cut costs.
"The economic slowdown creates opportunities for Shell to reduce supply-chain costs, as spare capacity in the services industry comes into play," he said in a statement ahead of the company's annual strategy update in London.
Shell plans $31 billion in capital expenditures in 2009, slightly less than the $32 billion it spent in 2008. Shell has said the company doesn't expect to cut jobs.
In January, Shell reported full-year 2008 earnings of $26.3 billion, down from $31.3 billion in 2007, because of a sharp fall in oil prices and a corresponding fall in the value of its inventory.
Shell said dividends for 2009 are expected to be about $10 billion, with dividends in the first quarter up 5% from a year earlier.