Shell pessimistic on access to OPEC reserves
Mon Jun 6, 2005 6:06 PM ET
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LONDON, June 6 (Reuters) - Royal Dutch/Shell Group (SHEL.L: Quote, Profile, Research) (RD.AS: Quote, Profile, Research) believes it and other western oil majors are unlikely to gain significant access to OPEC countries' oil reserves over the next 20 years, a Shell report said on Monday.
If the Anglo-Dutch oil group is right, the international oil companies (IOCs) are set to miss out on the sector's biggest prizes, despite lobbying by industry executives and western governments.
Shell is struggling more than its rivals are to replace the oil it pumps with new finds. Its 'Shell Global Scenarios to 2025' report, published on Monday, suggests Shell is not banking on the oil-rich Gulf states to provide a quick fix as it works to repair its record for finding oil, after an embarrassing reserves overbooking scandal last year.
Shell's report outlined three possible scenarios for the international economy over the next 20 years. In two of these scenarios, tough regulation and nationalism hamper the operations of multinational corporations.
But even in the third, called the "open doors" scenario, in which the free market is allowed to "provide solutions to the crises of security and trust," OPEC nations are expected to reserve their best oil fields for their own National Oil Companies (NOCs).
Under another scenario, called the "Low Trust Globalisation" scenario, Shell and other IOCs would have even dimmer prospects for replenishing their dwindling reserves from OPEC resources. While under the "flags" scenario, international oil companies would be "between a rock and a hard place" with little chance of accessing OPEC resources.
France's Total (TOTF.PA: Quote, Profile, Research) has frequently argued, with French government support, that OPEC nations should open the door to international oil companies. The worlds biggest listed oil company, Exxon Mobil (XOM.N: Quote, Profile, Research) and No. 2 BP Plc (BP.L: Quote, Profile, Research) also are keen to get a piece of the OPEC pie.
Shell's report also outlined the potential for non-conventional energy sources such as oil sands, in which Shell has been adding investments in the past year, to play a role in boosting reserves for oil companies.
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