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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (4492)	7/29/2006 5:23:39 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 24207

Shell Shocked Christopher Helman 07.27.06, 3:00 PM ET forbes.com Excerpt: In physical terms Shell is weak. Over the past three years it has replaced only 38% of the oil it has pumped. It is desperately searching for new pools of crude while trying to make up for their scarcity by shifting its focus toward natural gas. Gas is plentiful but hard to move--hence, in most cases, much less valuable as it comes out of the ground. Shell has suffered disarray in giant projects in Nigeria and on Russia's Sakhalin Island, and pricey delays in developing several prospects, including South Mars. All oil companies confront the fact that petroleum is getting hard to find in politically stable parts of the globe. But Shell is in more of a crisis than the others because of a problem of its own doing: For years it exaggerated the size of its reserves. In January 2004 it confessed to the problem, eventually slicing 4.5 billion barrels of oil-and-gas equivalents off proved reserves, which now stand at 11.5 billion barrels. Counting only crude oil, reserves are down from 6.6 billion barrels in January 2003 to 4.6 billion now. This is more than a bookkeeping matter. Shell's production of oil has been dwindling at a rate of 7% a year. Estimating reserves is as much art--or politics--as science. Shell has been in Nigeria for 50 years, and there's a lot of oil there. But how much can it get its hands on? Some of its Nigerian fields had leases set to expire before the company could possibly recover the oil it claimed as proved reserves. And relations with the host government are not good. The company's enemies in that country accuse it of destroying the environment, bribing officials, arming security forces and working behind the scenes to silence anti-Shell protesters. The company says it is a responsible corporate citizen and respects human rights. theoildrum.com